Tax slab revision after consultations – Finance Minister

Finance Minister Pranab Mukherjee on Friday said the government will take a view on new tax slabs after receiving inputs from different stakeholders on the revised draft of the Direct Taxes Code (DTC).

“The government will take a final view (on tax slabs) after receiving all the inputs,” he said when asked whether the government was likely to retain the tax slabs suggested in the original DTC draft.

The first DTC draft, released in August, had proposed 10 per cent tax on the income of Rs 1.6 lakh-Rs 10 lakh, 20 per cent on Rs 10 lakh-Rs 25 lakh and 30 per cent beyond Rs 25 lakh in a year. At present, 10 per cent is levied on income between Rs 1.6 lakh-5 lakh, 20 per cent on Rs 5 lakh-8 lakh and 30 per cent over Rs 8 lakh.

The revised draft, on which the Finance Ministry has invited comments from the public till June 30, is silent on tax slabs. However, it did mention that tax slab and rates proposed in the first draft would be revised.

“The proposal in this Revised Discussion Paper would lead to a reduction in the tax base proposed in the DTC. The indicative tax slabs and tax rates and monetary limits for exemptions and deductions proposed in the DTC will, therefore, be calibrated accordingly while finalising the legislation,” the revised draft had said.

 Mr. Mukherjee declined to give any clear indication about the new tax slabs saying “these are only discussion papers. How will I comment?”

The Minister said the tax structure would be revealed in the legislation to be introduced in Parliament.