Direct Tax Code

Recently Government of India has proposed a new 'Direct Tax Code' (DTC) which will be implemented soon. Everybody is wondering that how much he will be benefitted by this new coding. Will he be shelling out more money from his pocket in the name of TAX or will he be saving too much for his pocket to hold?

As you know, that every coin has its two faces. The only difference in this case is that better side is more shining and will surely benefit a lot of tax-payers. Here are some key points of this draft. First, some cons then pros.

1. Now, your taxable income will count each and every paisa spent on you by the company i.e. all the allowances, TA, DA and whatever perks you enjoy. It will surely increase your total taxable income.

2. You won't get the tax benefit on the interest payable for your home-loans. This point will demoralise those house buyers who want to buy a house to save tax.

3. You have to pay tax on all your savings returns like on PF, EPF, PPF etc. after 31st March, 2011. This point is valid only for the new contributions made on or after the commencement of this code.

4. Happy slabs: Tax-free Income upto 1.6 Lakhs, 10% Tax from 1.6 Lakhs to 10 Lakhs, 20% Tax from 10 Lakhs to 25 Lakhs and 30% thereafter. This will surely bring happiness to your face.

5. What more, You can invest upto 3 Lakhs rupees and get the tax benefit. Earlier this was limited to 1 Lakh rupees only. This point will makeover for the point no.3.

The bill is supposed to be tabled in the Winter session this year. If this bill is passed, it will benefit us for sure.