Income-tax rates proposed in new Direct Taxes Code

Income-tax rates proposed in new Direct Taxes Code

The Finance Minister Mr. Pranab Mukerjee has today presented in the Parliament, a new code for Direct taxes. The new code is named Direct Taxes Code, 2009 (DTC2009). The code when passed in Parliament will come in force from assessment year 2011-12 i.e form financial year 2010-11. This code shall Income Tax Act, Wealth Tax Act and some other Direct Tax Laws.
Income-tax rates proposed in new Direct Tax Code
The rates of taxes are given in First Schedule of the New Code. In existing Income-tax Act, 1961, the rates are declared by Finance Act (Budget) passed in Lok Sabha every year. Rates are provided in act to provide long-term stability in tax-rates.
The tax rates proposed in the code are as under
The new tax rate for individual taxpayers have been substantially liberalised and are
indicated below:-
(I) In the case of every individual, other than women and senior citizens, -
Rates of income-tax
(1) where the total income does not exceed Rs.1,60,000 : Tax rate shall be Nil;
(2) where the total income exceeds by Rs.1,60,000 but does not exceed Rs.10,00,000 : 10 per cent of the amount which the total income exceeds Rs.1,60,000;
(3) where the total income exceeds Rs.10,00,000 but does not exceed Rs.25,00,000 : Rs.84,000 plus 20 per cent by which the total income exceeds Rs. 10,00,000;
(4) where the total income exceeds Rs.25,00,000 : Rs.3,84,000 plus 30 per cent of the
amount by which the total income exceeds Rs.25,00,000;

(II) In the case of woman below the age of sixty-five years at any time during
the financial year,-
Rates of income-tax
(1) where the total income does not exceed Rs. 1,90,000 : Nil;

(2) where the total income exceeds Rs.1,90,000 but does not exceed Rs.10,00,000 : 10 per cent of the amount by which the total income exceeds Rs.1,90,000;
(3) where the total income exceeds Rs.10,00,000 but does not exceed Rs.25,00,000 : Rs.81,000 plus 20 per cent of the amount by which the total income exceeds Rs.10,00,000;
(4) where the total income exceeds Rs.25,00,000 : Rs.3,81,000 plus 30 per cent of the
amount by which the total income exceeds Rs.25,00,000;

(III) In the case of senior citizens,-
Rates of income-tax
(1) where the total income does not exceed Rs.2,40,000 : Nil;
(2) where the total income exceeds Rs.2,40,000 but does not exceed Rs.10,00,000 : 10 per cent of the amount by which the total income exceeds Rs.2,40,000;
(3) where the total income exceeds Rs.10,00,000 but does not exceed Rs.25,00,000 : Rs.76,000 plus 20 per cent of the amount by which the total income exceeds Rs.10,00,000;
(4) where the total income exceeds Rs.25,00,000 : Rs.3,76,000 plus 30 per cent of the
amount by which the total income exceeds Rs.25,00,000;
The tax rate for companies (both domestic and foreign) can be substantially reduced to a uniform rate of 25 per cent. However, foreign companies would be required to supplement their corporate tax liability by a branch profits tax of 15 per cent. on branch profits (that is, total income, as reduced by the corporate tax). The rates of tax in all other cases can continue at the existing levels.