8/7/2019 Direct Tax Code

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8/7/2019 Direct Tax Code

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Men and women are treated same now

4. Exemption will remain same as 1.5 lakhs per year for interest on housing loan for self-occupied property.

5. Only half of Short-term capital gains will be taxed. e.g. if you gains 50,000, add 25,000 toyour taxable income.

Long term capital gains (From equities and equity mutual funds, on which STT has been paid)are still exempted from income tax.

6. As per changes on 15th June, 2010, Tax exemption at all three stages (EEE) savings,accretions and withdrawalsto be allowed for provident funds (GPF, EPF and PPF), NPS (newpension scheme administered by PFRDA), Retirement benefits (gratuity, leave encashment, etc),pure life insurance products & annuity schemes. Earlier DTC wanted to tax withdrawals.

7. Surcharge and education cess are abolished.

8. For incomes arising of House Property: Deductions for Rent and Maintenance would be

reduced from 30% to 20% of the Gross Rent. Also all interest paid on house loan for a rentedhouse is deductible from rent.Before DTC, if you own more than one property, there was provision for taxing notional renteven if the second house was not put to rent. But, under the Direct Tax Code 2010 , such aconcept has been abolished.

9. Tax exemption on LTA (leave travel allowance) is abolished.

10. Tax exemption on Education loan to continue.

11. Corporate tax reduced from 34% to 30% including education cess and surcharge.

12. Taxation of Capital gains from property sale : For sale within one year, gain is to be addedto taxable salary.For long term gain (after one year of purchase), instead of flat rate of 20% of gain afterindexation benefit, new concept has been introduced. Now gain after indexation will be addedto taxable income and taxed at per the tax slab.Base date for cost of acquisition has been changed to 1st April, 2000 instead of earlier 1st April,1981.

14. Medical reimbursement : Max limit for medical reimbursements has been increased to50,000 per year from current 15,000 limit.

15. Tax on dividends: Dividends will attract 5% tax.

15. Bad news for NRIs : As per the current laws, a NRI is liable to pay tax on global income ifhe is in India for a period more than 182 days in a financial year. But in new bill, this durationhas been changed to just 60 days.This is very unfair to Seafarers. To avoid any income tax, an Indian sailor employed with aforeign ship will have to stay maximum for 60 days in India