New Tax Code Denies Women Exemption Edge 

Makes LTA Taxable Every Year 

The simplified Direct Taxes Code Bill introduced in Parliament on Monday, which will become effective from April 1,2012,holds a few surprises, including withdrawal of tax deduction on the principal component of housing loans.
The bill, which will replace the Income Tax Act 1961,seeks an increase in exemption threshold of individuals from the current Rs 1.6 lakh to Rs 2 lakh and reduce corporate taxes to a flat 30%.
Revenue secretary Sunil Mitra, briefing the media on the bill, pointed out that only the interest component of a housing loan will be considered for deduction. So, if your equated monthly installments add up to Rs 1.5 lakh and comprise an interest outgo of Rs 75,000 and an equal amount as principal, you can avail deduction of only the interest or Rs 75,000.
Incentives have been withdrawn for women taxpayers by clubbing them with men, with income up to Rs 2 lakh exempt. The earlier proposal was to place women taxpayers and senior citizens at an exemption level of Rs 2.5 lakh.
There is also no mention of LTA or LTC in the exemptions, indicating that the sop has been done away with.
Housing loan comprises 50% of the total deduction of up to Rs 3 lakh on savings. Other deductions allowed include Rs 1 lakh on pension, PF and gratuity funds and up to Rs 50,000 for tuition fees of kids, pure life insurance premium and health cover.

Some Pain, Some Gain 

The Direct Taxes Code will be effective from April 1,2012.First return of income under its norms will be filed after Mar 31,2013 


Deduction of up to 3 lakh allowed 

1. 1 lakh on pension, PF and gratuity funds 

2. Upto 50,000 for expenditure on tuition fees, pure life insurance premium and health cover 

3. Up to 1.5 lakh for interest paid on housing loan.No deduction on principal LTA will be taxed every year 

Capital gains 

Capital gains on listed securities held for more than a year will not be taxed.If held for less than a year,it will be taxed at 5%,10% or 15% Securities transaction tax to continue 

MF/ULIP 

Income from equity-oriented mutual funds or ULIP shall be subject to tax @ 5%