People earning more than Rs 10 lakh a year may save up to Rs 41,040 in income tax, if slabs proposed by the Direct Taxes Code (DTC) bill come into effect, experts said.
Similarly, tax burden would reduce by Rs 21,540 for those earning annual income between Rs 5 lakh and Rs 10 lakh, while those making Rs 2 lakh to 5 lakh could be richer by Rs 7,660, Deloitte Haskins & Sells Partner Neeru Ahuja said.
According to the bill presented in the Lok Sabha on Monday, income from Rs 2-5 lakh is likely to attract tax rate of 10 per cent; 20 per cent in the Rs 5-10 lakh bracket and 30 per cent above Rs 10 lakh.
At present, income between Rs 1.60 lakh and Rs 5 lakh attracts 10 per cent tax, while the rate is 20 per cent for the Rs 5-8 lakh bracket and 30 per cent for above Rs 8 lakh.
The bill proposes to raise income tax exemption limit to Rs 2 lakh from the current Rs 1.60 lakh.
"For the individuals, DTC tax slabs are certainly beneficial. Their tax liabilities will go down," DSK Legal Partner Balbir Singh Mastan said.
For senior citizens, exemption limit is proposed to be raised to Rs 2.5 lakh from Rs 2.40 lakh.
Individuals over 65 years, or senior citizens, could see tax burden lessen by Rs 4,420, if they earn Rs 5 lakh a year, while those earning Rs 10 lakh will save Rs 18,300 tax.
Senior citizens earning Rs 15 lakh annually could save Rs 37,800 in case the bill is enacted.