The Cabinet is likely to consider Thursday
the Direct Taxes Code (DTC) Bill, which seeks to overhaul the over 50-year old
income-tax law, with minor rejigs in the draft, including in the income-tax
slabs.
“The DTC Bill is on the agenda of the Cabinet
meeting tomorrow,” a source said.
The exemption limit at Rs 2 lakh for individual
tax payers is unlikely to be touched, but a new slab of 35 percent may be
introduced for the super-rich.
Besides, Minimum Alternate Tax (MAT) may be
levied on book profit and not on gross assets, sources said. Further, the Securities
Transaction Tax (STT) is likely to be retained, as against the recommendation
of the Standing Committee on Finance that the levy be abolished.
Among other things, the Standing Committee,
headed by senior BJP leader Yashwant Sinha, had suggested raising the
income-tax exemption limit to Rs 3 lakh from Rs 2 lakh proposed in the DTC
Bill, 2010.
The DTC bill, which aims to rationalise tax
rates to bring more people and companies under the tax net, was introduced in
Parliament in 2010.
Finance Minister P Chidambaram had earlier
said he intends to bring the DTC Bill in the Monsoon session of Parliament,
following submission of the Standing Committee’s recommendations. The ongoing
Monsoon session is scheduled to end on August 30.
The first draft prepared by Chidambaram in
2009 had proposed an income-tax slabs of Rs 1.6-10 lakh, Rs 10-25 lakh and Rs
25 lakh and above. Besides, corporate tax was proposed at 25 percent.
This was followed by the draft DTC Bill
prepared by then-Finance Minister Pranab Mukherjee in 2010, which proposed the
slabs at Rs 2-5 lakh, Rs 5-10 lakh and Rs 10 lakh and above and corporate tax
at 30 percent.
The
Standing Committee suggested slabs of Rs 3-10 lakh, Rs 10-20 lakh and Rs 20
lakh and above. On corporate tax, it recommended the rate be retained
Source: The Economic Times
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