Tax Slab Rate of 35% Proposed Under DTC Bill

Category: InvestmentsTax Planning Comments: One comment

New 35% Tax slab

Luxury comes at a cost and this is going to be true in coming days with the clearance of Direct Tax Code or DTC Bill, 2013. It is not only proposed but most certainly will get the nod of Cabinet to tax the Super Rich @35% tax. The existing tax slabs are going to be revised with addition of another slab of 35% covering the Super Rich. Not only this, there will be more changes in the Wealth Tax and addition of few more assets within the meaning of wealth, like expensive watches and paintings.
There will be sweeping changes to the existing Income Tax Act, 1961 and it is bound to be replaced by the new DTC Bill.

The new DTC Bill, 2013,

will add the fourth slab for those who have income over certain threshold. At present the highest rate of tax @30% is applicable to those having annual earning over Rs.10 lakhs.
As per the current tax slabs individuals are taxed under different tax rate slabs as per their annual income. Those earning less than Rs.2 lakhs is exempt from paying tax. 10% for those earning between Rs.2 lakhs to Rs.5 lakhs. 20% for those earning between Rs.5 lakhs to Rs.10 lakhs. Now these slabs are likely to change with introduction of new law.
The current exemption limit of Rs.2 lakh is not going to change in the near future as was expected and proposed by many.

Also to add, you may have to pay an additional tax @ 10% if your annual earnings on dividend on mutual funds and equities exceed 1 crore.

For companies, a minimum alternate tax (MAT) may be levied on book profit and the securities transaction tax (STT) is likely to be retained.

With the economy on a free fall with no sign of recovery and all the government efforts going down the drain, government has made up its mind to fill its booty with all possible means. Not only means of earning are being increased, but the existing recovery and implementation process has also been beefed up and tightened to collect as much revenue possible.

  • Vivek

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