India's proposed Direct Tax Code of 21st Century

Benfits of proposed changes Direct Tax code-

Deduction (the popular section 80C) increased to Rs 3 lakh from present Rs 1 lakh. So a person with taxable income of Rs 10,00,000 is likely to save approx Rs 1,20,000 annually.

Corp tax rates, including for foreign cos, reduced to 25% from 34%.

Net wealth tax exemption limit increased to Rs 50 crores from Rs 30L Wealth tax rate cut to 0.25% from 1%.

Indefinite carry forward of tax losses.

Deduction for donation towards scientific research @ 125%.

Agri income stays outside tax net.

Deductions for Royalty income of authors who are individual residents up to Rs 3L.

Deduction for Royalty income on patents for individual residents up to Rs 3L.

STT abolished

Cost inflation adjustment to be available for transfers anytime after one year from end of year in which asset is acquired (earlier 3 yrs, except for shares)

Base date for capital gains tax shifted from April 1, 1981 to April 1, 2000—capital appreciation up to 2000 not taxable

Max penalty down to two times tax amount (from three times tax)