The Direct Taxes Code (DTC) is said to replace the existing Indian Income Tax Act, 1961 will be rolled in 2014. The highlights of the Direct Taxes Code bill are

• Common threshold Income Tax limits and women proposed at 200,000 Rupees per annum (proposed), up from 180,000
• 10 per cent tax on annual income between 200,000-500,000; 20 per cent up to 1 million, 30 per cent above 1 million rupees
• Tax burden at highest level will come down by Rs. 41,040 annually
• Proposal to raise tax exemption for senior citizens to Rs. 250,000 from 240,000 lakh currently.(NOTE:- Union budget 2011-12 already has proposed it.)
• Corporate Tax to remain at 30 per cent but without surcharge and cess
• MAT to be 20 per cent of book profit, up from 18.5 per cent
• Proposal to levy dividend distribution tax at 15 per cent
• Exemption for investment in approved funds and insurance schemes proposed at Rs. 150,000 annually, against 120,000 currently
• Proposed bill has 319 sections and 22 schedules against 298 sections and 14 schedules in existing IT Act
• Once enacted, DTC will replace archaic Income Tax Act
• However, many provisions in Income Tax Act will be a part of DTC as well
• Mutual Funds/ULIP dropped from 80C deductions : Income from equity-oriented mutual funds or ULIP shall be subject to tax @ 5%
• Fringe benefits tax will be charged to the employee rather than the employer

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