Budget 2012: Liberal Tax System for DTC

Bangalore: The Standing Committee on Finance has suggested a very moderate tax regime in its proposals on the Direct Taxes Code Bill, 2010 (DTC). The key suggestions made by the committee affecting individual tax payers are:

Tax Rates

The critical exemption limit as restricted in DTC is suggested to be improved from Rs.2 lakh to Rs.3 lakh and the tax slabs are also to be extended where individuals pay tax at 10 percent on income between Rs.3 lakh and Rs.10 lakh, 20 percent on income between Rs.10 and Rs.20 lakh and 30 percent on income above Rs.20 lakh.

Employment Income

Payment and reimbursement of medical insurance premium will be made tax-free. Under DTC, it is measured as a taxable bonus. Committee has also suggested taxing the stock option benefits only at the time of sale rather than on vesting.