Having altered the income tax slabs in the Budget, the Finance Ministry today said the next round of widening of the tax slabs is possible when the Direct Tax Code (DTC) comes into effect, likely from 2011-12.
"A further widening (of tax slabs) is possible. But this will happen when revised (draft DTC) paper comes," Revenue Secretary Sunil Mitra told reporters on the sidelines of a CII seminar here today.
The Finance Ministry has already come out with the draft DTC, but since there are a number of grievances on it, it will come out with a revised draft in the first quarter of next fiscal so that a Bill to this effect can be tabled in the monsoon session of Parliament.
"The period is going to be between April and June. That is when we have time for this process, if we were to get the legislative process commencing from around July during the monsoon session. The Finance Minister has said he would like to take the legislative process. The only time we have is between April and June," Mitra said.
In a Rs 21,000-crore bonanza, the Budget has widened the income tax slabs for all. While there would be no tax for income up to Rs 1.6 lakh, a tax of 10 per cent would be levied for income up to Rs 5 lakh, 20 per cent for up to Rs 8 lakh and 30 per cent beyond that level.
As per the existing structure, there is no tax on income up to Rs 1.6 lakh, but 10 per cent is levied on income up to Rs 3 lakh, 20 per cent up to Rs 5 lakh and 30 per cent thereafter.
However, the changes in the I-T slabs as proposed in the draft DTC would be much steeper as it suggests 10 per cent tax on income between Rs 1.6 lakh and Rs 10 lakh, 20 per cent on up to Rs 25 lakh and 30 per cent on income beyond that.
