PRESENTATION ON

DIRECT TAX CODE(DTC) Click to edit Master subtitle style & Presented By: ITS IMPACT Priya Jain & Anshu
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What is Tax?

Tax is the financial charge imposed by the govt. on income, commodity or activity.

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What is Direct Tax? Burden of Tax

On the Payer

Capital gain tax, income tax, corporate income tax, wealth tax etc 4/21/12

What is Indirect Tax? Burden of Tax

Person other than user

VAT & sales tax, excise duty etc.

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A BIG CHANGE IN 4

DTC in India Direct Tax related matters

Central Board of Direct Taxes(CBDT)

4/21/12 (functioning under Central Board of Revenue

Highlights of DTC
o

DTC removes most of the categories of exempted income. Tax saving based investment limit remains 100,000 + 50000 (only for pure life insurance) The proposed rates and slabs are as follows: Annual Income Tax Slab
Up-to INR 200,000 (for senior Nil citizens 250,000) Between INR 200,000 to 500,000 Between INR 500,000 to 1,000,000 Above INR 1,000,000 10% 20% 30%

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Highlights of DTC
o

Only half of Short-term capital gains will be taxed. Surcharge and education cess are abolished Rent on House Property Tax exemption on LTA (leave travel allowance) is abolished. Corporate tax 33.33%

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30%

Highlights of DTC
o

Medical reimbursement:50,000

15000 4/21/12 o Dividends will attract 5%

Direct Tax Code

PERSONAL INCOME TAX

(Amount in lakh)

10%

20%

30%

Now

1.6-3

3 L -5L

5L & above

DTC

1.6-10

10L -25 L

25L & above

Likely

2.0-5

5-10

10L & above

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New V/s Old

Income in F.Y.2010Tax F.Y.2011Tax Lakh 11 Liability 12 Liability Tax Slab Tax Slab (%) (%) Up to Nil Nil Nil Nil Rs.1.6 Lakh Rs.3 Lakh Rs.5 Lakh Rs.8 Lakh Rs.10 Lakh
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Savings

Nil

10% 20% 30% 30%

Rs.14000 Rs.54000 Rs.14400 0 Rs.20400 0

10% 10% 20% 20%

Rs.10000 Rs.30000 Rs.90000

4000 24000 54000

Rs.13000 Rs.74000 0

How DTC save Tax?

Name : Ajay Patel Salary : 8 lacs per year Investments : Investment of 30,000 in Mutual funds, 30,000 in EPF , 20,000 in PPF and 50,000 in Insurance Policy .
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Old V/s DTC

Total income= Rs 8 Lacs+ 80,000(STCG) Tax as per Old System
Amount Exempted = 1 lac in 80C = 1 Lac
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IMPACT OF DTC
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Major changes by DTC which may affect Common Man

Positive impact on Common Man
o

Tax exemption up to 3 Lacs. NPS will be more benefited.

Recommends LTCG to be reintroduced & STCG 4/21/12 to be added in Income.

Impact on Corporate Houses

o

Corporate tax will be 30% from 33.33% and in DTC 1st April 2012 it will be 25%. Corporate tax for foreign companies will remain same at 40%

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TAX from People

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Impact on Govt. from Tax proposal 2011-2012

Benefits to Govt.
o

Reduce Paper work Because of exceeding tax slab revenue from 30% slab reduces.

Loss to Govt.
o

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Impact on Govt. from DTC

o

People will disclose their income more which will reduce black money in the market. Govt. will have less tax collection because maximum revenue is from 2.2% people in slab 30% and that slab will be up to 25 lacs from 8 lacs, and also due to increased exemptions.

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Impact on Infrastructure
o

MAT will be taken at 20% on Gross assets rather than 18% on book profits.

As per GAAR(General Anti- Avoidance Rule) no tax will be charged for 10-15 yrs for Large Infrastructure projects.

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Impact on Venture Capital Funds

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Impact on Telecom Sector

o

No specific provision dealing with the deductibility of the licence fees. Further, the DTC is also silent vis--vis deductibility of the 3G spectrum fees. Unabsorbed business losses and depreciation is allowed to be carried forward for an infinite period of time.

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o

O R
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ANY QUERY?
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Thank You!
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