Cabinet approved Direct TaxCode

Cabinet approved Direct TaxCode

Cabinet has finally approved the Direct Tax Code and now it would go to Parliament for approval . Finally the Tax system of our country is going to simplify after New tax code comes into effect from 1st Apr 2011 . The bad part is that the tax slabs have been revised and now its much lesser than what was proposed earlier.
Change in Tax Slab
New Tax Slab : 10% for 2-5 lacs , 20% for 5-10 lacs and 30% for above 10 lacs
Proposed Tax Slab earlier : 10% on 1.6-10 lacs , 20% for 10-25 lacs and 30% for above 25 lacs.
Some More Features
Deductions from taxable income will be available for interest on housing loans up to Rs 1.5 lakh per annum
For women and senior citizens, the exemption limit would be Rs 2.5 lakh per annum
Upto 1 lacs could be saved for payments into PF and similar superannuation schemes
Deduction of up to Rs 50,000 for life insurance and health insurance premiums or tuition fees.
Securities Transaction Tax (STT) and Education cess are out .
Life Insurance payments and mutual fund income are liable for 10% TDS (source)
HRA no longer available.