New Tax code: Pay 10% tax for salary up to Rs 10 lakh

The government on Wednesday initiated radical tax reforms through a draft code that aims at moderating income tax rates, abolishing

Securities Transaction Tax and increasing deduction for savings up to Rs three lakh. The new Direct Taxes Code has suggested a significant expansion of personal income-tax slabs, with levels of relief going up with incomes.

Releasing the Direct Taxes Code that will ultimately replace the over four-decades old Income Tax Act and bring all other direct taxes like wealth tax under its purview, Finance Minister Pranab Mukherjee today said if reasonable level of discussion happens on the code, a bill could be placed in the winter session of Parliament.

The Code said that the 10 per cent tax rate should apply to an annual income of Rs 1.6-10 lakh per annum and the 20 per cent rate to Rs 10-25 lakh.

The maximum rate of 30 per cent, it added, should apply to income above Rs 25 lakh per annum.

Income Tax exemption limit increased, corporate tax rate unchanged
NEW DELHI: Finance Minister Pranab Mukherjee on Monday proposed to increase the Income Tax exemption limit for senior citizens by Rs 15,000, for Tips to lower your tax bill Plan tax investments early women and others by Rs 10,000 each, while keeping the corporate tax rate unchanged.

The exemption limit will now be Rs 240,000 for senior citizens, Rs 190,000 for women and Rs 160,000 for others. The 10% surcharge on personal Income Tax has also been slashed.

For women the exemption limit has been raised to 190,000 and for others the exemption limit has been raised by Rs 10,000 to 160,000.

He has also gone ahead and abolished the fringe benefit tax. The Budget has also abolished the Commodities Transaction Tax.