New Tax Codes 2009 | Direct Tax Code

The govt of India has introduced a new direct tax code that seeks to simplify the tax regime in the country. This was a much awaited proposal as the government currently calculates taxes based on the Income Tax Act 1961.

This code (Read: Direct Taxes Code full text) is expected to replace the existing income tax laws.

However, there is a catch. According to the new proposals, all interest on savings will be taxed from 2011 onwards.

The main proposals of the new code are as follows:

* Income tax rates slash
* Most exemptions to go
* Interest on savings to be taxed
* Up to Rs 1.6 lakh: No tax
* 10 per cent tax for income of Rs 10 lakh (Rs 1.2 lakh in hand)
* 20 per cent tax for Rs 25 lakh income (Rs 2.60 lakh more in hand)
* 30 per cent tax for income over Rs 25 lakh
* To raise deduction limits for savings upto Rs 3,00,000
* Corporate Tax: Down from 30 per cent to 25 per cent
* Wealth tax to be levied for wealth above Rs 50 crore

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