Direct Tax Code

Prepared by:
Amrita Bulchandani
Raj Kalal
Kartik Chauhan
Introduction
 The Direct Tax Code (DTC) bill was tabled in Parliament on
August 30, 2010. Made up of more than 400 pages

 DTC bill is going to replace the Income Tax Act, 1961 and the
Wealth Tax Act, 1957

 It will come into effect from FY 2012-13 starting from 1st

April, 2011
Slabs Under DTC
Men and Women under the age of 65

Income IT Rate

Up to Rs 2,00,000 0%

Rs 2,00,001 to Rs. 5,00,000 10%

Rs. 5,00,001 to Rs. 10,00,000 20%

Above Rs. 10,00,001 30%

 Cont.
Men and Women above the age of 65

Income IT Rate

Up to Rs 2,50,000 0%

Rs 2,50,001 to Rs. 5,00,000 10%

Rs. 5,00,001 to Rs. 10,00,000 20%

Above Rs. 10,00,001 30%

Features of DTC
 The corporate tax rate has been proposed at 30% (including
foreign companies)

 MAT rate has been increased to 20% and credit for tax paid
under MAT in extended upto 15 years

 Wealth tax proposed at 1% where revenue increases 1crore

 Royalty and fees for technical services is to be taxed at 20%

of gross income
 Cont.
 DTC allow the revenue department to seek tax from foreign
companies if it is proven that they are controlled from India

 Unit set-up in SEZ to get deduction from profits if set up

before March 31, 2014

 Exemption limits US 80C has been increased to 1.5 lakhs

from 1 lakh

 Tax audit limit is enhanced for profession Rs 25 lakh and from

business 1 crore Rs
Unanswered provisions
 The DTC doesn't talk about the amount up to which the
interest paid on education loan would be exempt from income
tax

 The DTC doesn't talk about deduction of up to Rs. 20,000

under section 80CCF available on investment in infrastructure
bonds

 Bank fixed deposits (FDs) of 5 years duration enjoy deduction

under section 80C but even this provision is not stated
 Cont.
 It doesn't talk about the treatment of perquisites like company
car, employer provided housing accommodation, etc

 DTC takes away the privilege that women enjoyed as now

men and women would be treated same