Tax Code

Taxcode proposes raising threshold for wealth tax to Rs 50 cr The Direct Taxes Code proposes to substantially raise the threshold limit for levy of wealth tax to Rs 50 crore from Rs 30 lakh, a suggestion, if accepted, would save many people from paying tax on their wealth. The rate of wealth tax according to the draft Direct Taxes Code should be reduced to 0.25 percent from one per cent currently. The wealth tax is levied under the Wealth Tax Act, which is proposed to be subsumed in the new Direct Taxes Code that will replace the Income Tax Act 1961. Finance

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Minister Pranab Mukherjee in the budget for 2009-10 had doubled the threshold for levy of wealth tax to Rs 30 lakh.

Giving the rationale for continuing with the wealth tax the code said, "Wealth carries with it, a degree of security, independence, influence and social power...Wealth constitutes and independent tax base which can be legitimately taxed through an annual tax on net wealth." Wealth Tax, the code said also helps to "partially capture the income tax avoided or evaded." New taxes code for greater incentives for savings