People earning more than Rs 10 lakh could save up to Rs 41,040 in income tax while those earning annual income between Rs 5 lakh and Rs 10 lakh would get Rs 21,540 richer, a news agency reported quoting experts.
Those making Rs 2 lakh to 5 lakh could be richer by Rs 7,660, informed Deloitte Haskins & Sells Partner Neeru Ahuja.
The landmark bill, which received Cabinet clearance on Thursday, Aug 26, was presented in the Lok Sabha by the Finance Minister Pranab Mukherjee on Monday, Aug 30.
The new provisions under the Direct Tax Code are:
- Tax for income between Rs 2 to 5 lakh - 10 per cent
- Tax for income between Rs 5 to 10 lakh - 20 per cent
- Tax for income over Rs 10 lakh - 30 per cent
- Corporate tax has been kept at 30 per cent
The limit for exemptions for salaried people is Rs 2 lakh, while that for senior citizens is Rs 2.5 lakh.
However, on a disappointing note, the Direct Tax Code will not be applicable from next financial year as hoped by many but will come into effect only from Apr 1, 2012.