The government tabled the Bill in the Lok Sabha on Monday. The Bill proposed to raise the exemption limit on income tax from the current Rs 1,60,000 to Rs 200,000.
The Bill, introduced by Finance Minister Pranab Mukherjee, seeks to widen income tax slabs to levy 10 per cent rate on income between Rs 200,000 and Rs 500,000, 20 per cent on between Rs 500,000-10 lakh and 30 per cent above Rs 10 lakh (Rs 1 million).
For senior citizens, tax exemption is sought to be raised to Rs 2,50,000 from Rs 2,40,000.
Currently, income between Rs 1,60,000-500,000 attracts 10 per cent tax; between Rs 500,000-800,000, 20 per cent and beyond Rs 800,000, 30 per cent.
The proposed tax slabs are much lower than originally suggested in the draft DTC Bill -- 10 per cent for Rs 1,60,000 to Rs 10 lakh, 20 per cent between Rs 10-25 lakh (Rs 2.5 million) and 30 per cent for income above Rs 30 lakh (Rs 3 million).
The Bill seeks to fix corporate tax at the current 30 per cent but without surcharge and cess.
With surcharge and cess, the current tax liability on corporates comes to over 33 per cent.
The legislation also proposes to increase MAT from 18 per cent to 20 per cent of book profit of a company.
It seeks to levy dividend distribution tax at 15 per cent.
Income on non-profit organisations, exceeding Rs 100,000, is proposed to be taxed at 15 per cent.
When enacted, DTC will replace archaic Income Tax Act.