Direct Tax Code Updates for 2011

On 26th August, 2010, Union Cabinet of India cleared the new Direct Tax Code (DTC). The new tax code proposes to raise the basic exemption limit from Rs 1.6 lacs to Rs 2 lacs. The new bill is expected to be introduced and discussed in Parliament on Monday, 30th August 2010.


New Expected Tax Slabs:
2 - 5 lacs : 10%
5 - 10 lacs : 20%
Above 10 lacs : 30%

The revised draft that came in June earlier this year, already exempted proposed tax on long-term savings. More picture will be cleared once it will be discussed in the parliament on Monday.
Find out the latest updates of DTC as discussed on 30th August 2010.

Updates on Direct Tax Code for 2011 by Pranab Mukherjee

Earlier in 2009, Indian Government proposed a new tax code for year 2011. In this proposed tax code, government indicated radical tax reforms to simplify taxation. To make it robust and accepted by citizens, this draft was open for public suggestions. Now on June 15th 2010, government released its revised version of proposed Direct Tax Code (DTC).

The major change that came is that tax on provident fund and life insurance products are to be treated on Exempt-Exempt-Exempt (EEE) basis instead of EET (Exempt-Exempt-Tax). Another major decision is for ULIPs. From the year 2011, new ULIPs will not have EEE benefit but existing ULIPs will continue to get EEE benefit. Further, there will be no capital gains on savings schemes.