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Finance Minister Pranab Mukherjee on Monday tabled the Direct Taxes Code (DTC) Bill in the Lok Sabha which proposed to raise the exemption limit on income tax from the current Rs 1.6 lakh to Rs two lakh. The Bill seeks to widen income tax slabs to levy 10 per cent rate on income between Rs 2 lakh to 5 lakh, 20 per cent on between Rs 5-10 lakh and 30 per cent above Rs 10 lakh. For senior citizens, tax exemption to be up to Rs 2.5 lakh. Currently, income between Rs 1.6-5 lakh attracts 10 per cent tax; between Rs 5-8 lakh, 20 per cent and beyond Rs 8 lakh, 30 per cent. The proposed tax slabs are much lower than originally suggested in the draft Direct Taxes Code bill -- 10 per cent for Rs 1.6 lakh to Rs 10 lakh, 20 per cent between Rs 10-25 lakh and 30 per cent for income above Rs 30 lakh. The Bill seeks to fix corporate tax at the current 30 per cent but without surcharge. It also proposes to increase Minimum Alternate Tax (MAT) from 18 per cent to 20 per cent of book profit of a company. The Bill will now go to a parliamentary panel for scrutiny.

Direct Taxes Code Bill tabled in Lok Sabha