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New Direct Tax Code Bill – lost its original fizz?
Finance - Tax Planning

The earlier proposal of introducing taxation upon withdrawal (EET) instead of the existing tax free (EEE) status for certain instruments like PPF etc. had earlier been withdrawn in a revision. If that were to be implemented perhaps the tax slabs could have led to a dramatic saving for all the individuals in different tax brackets. So overall there have been adjustments all around to create a balance in accumulating government revenues from tax. The maximum tax saving to be had if the earlier proposal was implemented would have worked out to a super save of around Rs.2L, while currently this would only work out to around Rs.26,000 in a financial year for a woman earning a little above Rs.10 L.

The new DTC bill is likely to be passed in the parliament on Monday. What was initially proposed was so strikingly dynamic and was expected to introduce a sea change in the ways taxation took place in the country. However, what was finally proposed to be sent to the parliament has been edited in so many ways that it did not translate to much feel most salaried tax payers.


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