New Direct Tax Code in 2011-2012, India
Government of India has proposed a new Direct Tax code or Direct Taxes Code to replace the old Indian Income Tax Act of 1961. This Direct Tax code is an attempt to simply the tax-life of an individual. The way it works is that the income tax slabs are increased, however several deductions (e.g. deduction on housing loan) and tax-breaks are taken away. A detailed post will be written about Direct Tax Code. Below you will find the proposed income tax slabs under the Direct Tax code will be debated in the Parliament and if approved, will be implemented in 2011-2012.
Income Tax rates or Tax Slabs under Direct Tax Code : Table
Direct Tax Code slabs, 2011-2012, Men
| Income: upto 1.6 lacs | no income tax |
| Income : 1.6 lacs to 10 lacs | 10 % |
| Income : 10 lacs to 25 lacs | 20 % |
| Income : above 25 lacs | 30 % |
| Income : upto 1.9 lacs | NO TAX |
| Income : 1.9 lacs to 10 lacs | 10 % |
| Income : 10 lacs to 25 lacs | 20 % |
| Income : above 25 lacs | 30 % |
| Income : upto 2.4 lacs | NO TAX |
| Income : 2.4 lacs to 10 lacs | 10 % |
| Income : 10 lacs to 25 lacs | 20 % |
| Income : above 25 lacs | 30 % |
Education cess and surcharge on total income tax
It is not clear whether education cess and surcharge will be applicable on income tax collected under direct tax code. According to the current indian income tax act, in addition to the income tax calculated according to the above income tax slabs, a 3% of Education cess is charged on the total Income tax paid (not on the total taxable income). If the taxable income exceeds Rs. 10 lacs, a 10% surcharge on the total income tax (not on the total taxable income) is also charged.
Source - http://autotechworld.in/1700/new-direct-tax-code-india-pay-less-in-taxes-from-april-2011-new-direct-tax-code-2011-highlights.html
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