New Delhi, Aug 30 (IANS) The Direct Taxes Code (DTC) is likely to result in a revenue loss of Rs.53,172 core in the first year of implementation, Revenue Secretary Sunil Mitra said here.
‘We will lose Rs.14,343 core in individual income tax and Rs.38,829 crore in corporate income tax,’ Mitra told reporters.
The new norm, which proposes to raise the exemption limit on individual income tax from the current Rs.1.6 lakh to Rs.2 lakh will be effective from April 1, 2012.
Mitra said in case parliament make changes in the proposed tax slabs the estimate of revenue loss would be different.
‘DTC aims to consolidate and integrate all direct tax laws. It will minimise exemptions and reduce compliance cost,’ said Mitra, adding several amendments in income tax act has necessitated the need for a simplified tax structure.
Under the proposed tax law, income on between Rs.2-5 lakh will be taxed at 10 percent, between Rs.5-10 lakh will be taxed at 20 percent and above Rs.10 lakh at 30 percent.
The exemption limit for senior citizens is proposed to be raised to Rs.2.5 lakh. However, there will be no special exemption for women.
Corporate income tax will be reduced to 30 percent from the current 33 percent, which includes surcharge and cess.
Mitra said profit-linked tax deductions for corporations would be replaced by investment-linked deductions. However, companies operating under SEZs will continue to enjoy profit-linked tax deductions.
