SBI Bank Clerical Special: Special Reading 2: New Tax Law

New tax law
The government has proposed a new tax income up to Rs 10 lakh at 10 per cent thereby raising the cap from Rs 3 lakh. For those who have income between Rs 10 lakh to Rs 20 lakh, the rate will be 20 per cent, whereas the highest rate of 30 percent is for income above Rs 25 lakh.
The law also reintroduces wealth tax and long term capital gains tax. The scope of income is expanded to value of perks, gifts, profits and capital gains while it excludes farm income. Deductions in respect of savings have been increased to Rs 3 lakhs from Rs 1 lakh. Tax exemptions and housing loans are proposed to be abolished.  The law has proposed a deduction in corporate tax rate to 25 per cent. There will be no surcharge, or cess either.
The finance minister has claimed that this new law would improve efficiency and equity of the tax system. While it introduces lower levels of taxation, it would improve the tax structure by expanding the tax base. The government is hoping to place a bill in the winter session of Parliament in this regard so as the new code is implemented from 2011.