The draft Direct Taxes Code (DTC) Bill, likely to be tabled in the ongoing session of Parliament, may bring down rates for income tax payers. The proposed code, to be implemented from April 2011, will replace the 50-year-old Income Tax Act.
“We are in the process of reducing the rate of tax and DTC will be a good example in that direction,” Central Board of Direct Taxes (CBDT) Chairman S S N Moorthy said at an Assocham tax conference.
Moorthy said India was coming down to a realistic platform where the rates would be almost in line with international standards. “We are in the process whereby we have to be taxpayer-friendly,” he added.
In the first DTC draft, the government had proposed to impose 10 per cent tax on income between Rs 1.6 lakh and Rs 10 lakh, 20 per cent on income between Rs 10 lakh and Rs 25 lakh and 30 per cent on income beyond Rs 25 lakh a year. The slabs, which the government said were indicative, were even wider than the slabs imposed in the Budget this year. The Budget had imposed 10 per cent tax on income between Rs 1.6 lakh and Rs 5 lakh, 20 per cent on that between Rs 5 lakh and Rs 8 lakh and 30 per cent on income of over Rs 8 lakh a year. The revised DTC draft did not indicate any rates.
Moorthy also said direct tax collections, at Rs 4.3 lakh crore for the current financial, were on track. “The target for the current year is about Rs 4.30 lakh crore. Fortunately, we are on track. We are growing at the rate of 15 per cent,” he added.
