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Direct Tax Code Bill to be revised
Posted on: 22/Aug/2013 2:16:21 PM
The revised Direct Tax Code Bill is being tabled today in the Cabinet. The Bill proposes a new 35-percent tax slab for people with incomes exceeding Rs 10 Crore per annum. The details of the Bill are as under:
1. The new Bill proposes a 35 percent rate for income above Rs 10 crore and has set up a fourth slab of tax rate for individuals, HUFs and artificial judicial persons.
2. All assets, physical and financial, will be included under the wealth tax. The wealth tax is to be levied on individuals, HUFs and private discretionary trusts.
3. The proposed Bill also has other provisions including the tax on dividend distribution, capital gains as well as taxation of indirect transfers of assets.
4. The Bill also aims to create parity between insurance products and mutual funds. A premium at less-than 10 percent of the sum assured will not be taxed. Pure life insurance is to remain outside tax net.
5. The proposal for a 50-percent threshold of global assets has been considered too high and a new threshold has been set at 20 percent.
6. A few anomalies have been removed and a specific provision has been introduced. The rental value as higher of contractual rent or 6 percent per annum of ratable value will be taxed and the vacancy allowance has been permitted.
7. The provisions related to non-profit organizations have been rationalized and the condition of specific modes of investment have been removed. Provisions of Finance Acts 2011, 2012 and 2013 are to be added to the DTC and provisions consistent with DTC to be incorporated.
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