Direct Tax Code cleared by Cabinet

The Direct Tax Code, which seeks to replace the Income Tax Act, 1961 and proposes to raise the Income Tax exemption limit from existing Rs 1.6 lakh to Rs two lakh was approved by the cabinet yesterday. Finance Minister Pranab Mukherjee while talking to mediapersons said at New Delhi yesterday that it will be a major relief to the salaried class. Under the new provisions in the DTC, the tax deduction for income between rupees two to five lakh would be 10 percent, rupees five to 10 lakh would be 20 percent whereas deduction of tax for income over rupees ten lakh would be 30 percent.