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Direct tax code


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Glimpse on DTC bill 2010 and Common man

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Direct tax code

  1. 1. DIRECT TAX CODE <br />Its time to pay back…<br />
  2. 2. WHAT IS IT????<br />Taxes Classified broadly as <br /> - Direct Tax <br /><ul><li>Taxes Directly paid by a Person or Corporate directly to the Government Like Income Tax ,Wealth Taxes, Corporate Tax, Capital Gain Tax, Petroleum Profit Tax.</li></ul>- Indirect Tax<br /><ul><li> Undoubtedly its all about tax paid indirectly like Taxes on goods and Services, Excise Duties, Export & Import Duties, VAT etc</li></li></ul><li>India And Tax Regime <br />India an Middle income Country have an oriental Tax Regime Since Before DTC bill 2010.<br />Being an 3rd Largest Economy in Asia and Emergent Global Economy .<br />Tax GDP ratio increased from 2.97 at the beginning of this decade to 6.45 percent in 2009-2010.(Kudos to IT revolution)<br />
  3. 3. Current Position & What we Expect<br />Income tax Payers Slab<br />95.75 % of Tax Payers are in 1- 5 Lacs income group<br />2% -Tax payers are in 5-8lacs income group<br />2.2% - Tax Payers are in >8 lacs Income<br />New Tax Code aimed at benefiting 1-5 Lacs Slab Significantly<br />Let us c How…….<br />
  4. 4. Proposed Tax Regime- As Per DTC<br />•    Tax for income between Rs. 2 lakh – Rs. 5 lakh: 10%•    Tax for income between Rs. 5 lakh – Rs. 10 lakh: 20%•    Tax for income over Rs. 10 lakh: 30%The limit for exemptions for salaried people is Rs. 2 lakh, while that for senior citizens is Rs. 2.5 lakh.<br />Corporate Tax -30%<br />Minimum Alternate Tax on book Profits -20%<br />
  5. 5. Reforms Under DTC bill(For Common Person)<br />Positive Effects:<br /><ul><li>New Tax Regime ,Attractive Income TAX Slab for Middle Income Group</li></ul>Tax Exemption May Increased From 1lacs to 3Lacs<br /> (Plan more to Get Exemption Effectively)<br /><ul><li>Securities Transaction Tax may be Abolished.</li></ul>……..R u an Share Market Savvy you may Benefited with a small Pie<br />
  6. 6. Minor Adverse Effect to Common Man<br />Maturity Amount Received by - Provident Funds, Mutual Tax are Taxable. Currently no taxes are Levied<br />(A better future planner will increase his investment to avoid cut on returns)<br /><ul><li>Interest Paid on Home Loans are Not Exempted</li></ul>Perks from Employer is taxable. Perks in Form of Interest free Loans, Free Lunch etc…<br />Nobody can gain without a loss<br />
  7. 7. An Example – DTC & Common Man<br />Name : Ajay PatelSalary : 8 lacs per yearInvestments : Investment of 30k in Mutual funds, 30k in EPF , 20k in PPF and 20k in Insurance Policy .Home Loan : Taken a Home loan and pays 80k as Principle and 1.4 lacs as Interest .<br />
  8. 8. How it works<br />Tax as per Current System<br /> Amount Exempted = 1.4 lacs as home loan interest + 1 lac in 80C<br /> = 2.4 Lacs Taxable Income = 5.6 lacs Tax = 14k (10% from 1.6 to 3 lacs) + 40k (20% from 3 – 5 lacs) + 18k (30% on 5 – 5.6 lacs) = Rs 72,000<br />Tax as per New Tax Code  Amount Exempted = 1 lac from (mutual funds , PPF , EPF , Insurance) + 80k as Home loan principle = 1.8 lacsTaxable Income = 6.2 lacsTax = Rs 44,000 (10% on 1.6 lacs – 6.2 lacs)<br />
  9. 9. It’s a time to think<br />Are you Coming under Middle Income Group<br />Plan Efficiently on Basic Investment Plan<br />Increase your Efficiency on Personal Finance<br />Prepare yourself to utilize Government Reforms <br />
  10. 10. Learn a Lot….Earn a Lot….<br />Thank you<br />
  11. 11. All the Information are Shared from the Gained Knowledge through Internet<br />Suggestion are Invited to tally the Errors with Correction<br />Thanks For Valuable Information offered by<br /><br />