New Tax codes for 2009 India

2009 New Tax codes Released

Finance Minister Pranab Mukherjee introduced new direct tax code. He unveiled a new draft tax code in the presence of home minister and former finance minister P Chidambaram, who started work on it during his tenure. The Government of India has released a fresh Direct Tax, which will allow people to calculate their own taxes and try to explain tax provisions in a simple manner.

Chidambaram said that this new code will be replacing the 1961 Income Tax and other direct tax laws. The new direct tax code would become a law only by 2011, said by former finance minister Chidambaram and also added that the new tax code would be a vast improvement over I-T Act 1961.

By introducing a new direct tax code, within 45 days, the Finance Minister, in his budget speech, had promised to simplify the income tax law. And Direct Tax Laws are to become more “saral” for taxpayers.

At the rate of 20 per cent taxed would be applied on the income between Rs 10 lakh and Rs 25 lakh and income after that would attract a rate of 30 per cent, as per the draft of the new Direct Taxes Code which is aimed at fundamental direct tax reforms. On income between Rs 3 lakh and Rs 5 lakh, 20 per cent rate is compulsory at present. Income beyond Rs 5 lakh attracts 30 per cent tax.

Mukherjee said that the new code was intended at eliminating the scope of lawsuit as far as possible, adding that the government would have informed discussions with stakeholders on the tax code.

The Finance Ministry will unveil the new direct tax code in a move that could change the way individual and companies are taxed.

One area that saw a lot of focus is the change in proposed slabs. Following are the details:

For Males

For Females

For Senior Citizens

The main proposals of the new code are as follows:

1. Slash income tax rates
2. Most exemptions to go
3. Interest on savings to be taxed
4. Up to Rs 1.6 lakh: No tax
5. 10 per cent tax for Rs 10 lakh income (Rs 1.2 lakh in hand)
6. 20 per cent tax for Rs 25 lakh income (Rs 2.60 lakh more in hand)
7. 30 per cent tax for income over Rs 25 lakh
8. To raise deduction limits for savings upto Rs 3,00,000
9. Corporate Tax: Down from 30 per cent to 25 per cent
10. Wealth tax to be levied for wealth above Rs 50 crore

Direct Tax Code India, New Direct Taxes Code Bill Released

The Direct Taxes Code Bill 2009 along with Discussion Paper is available online on Ministry of Finance website at the link shown below: the Ministry of Finance, Govt. of India Website.