As many of you are aware, Direct Tax Code Bill is introduced by the Government in the Lok Sabha. The content in the new bill is very similar.
Major Changes are as follows:
■ Applicable from 1st March 2010. That means it will be applicable for Citizens filing IT returns on or after April-1st 2013.
■ 5% Dividend Income Distribution tax to be Paid by MutualFunds [AMCs] and ULIPs [Insurance companies]
■ The short-term capital gains tax, currently levied at 15%, would now be levied at 50% of the three income tax slabs of 10%, 20% and 30%, i.e. 5%, 10% and 15%. Additionally, status quo is maintained on long-term capital gains tax that would continue to attract no tax subject to the levy of Securities Transaction Tax (STT)
■ Exemption Limit goes up from Rs 100,000 + Rs 20,000 [Infra Bonds] to Rs 100,000 + Rs 50,000 [for Health and Life Insurance]
The below chart shows the comparison of existing Tax Code Vs New Direct Tax Code in India
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