LOOP HOLES IN TAXES DTC (DIRECT TAX CODE)

MEANING :- LOOP HOLES

 Ambiguity in a system Which can be used to avoid procedure

of system

DEFINITION

Exploitation of a tax law which can reduce or eliminate tax  Legal, taxation strategies that are

exploited for personal gain.

HOW IT WORKS

 Local development law that requires 

An unoccupied building to pay real estate taxes so long as it receives a certificate of completion

 Builder :- choose not to "complete" the building.

SOME WAYS TO AVOID TAX

Contributing to charity Deferred Income Do a Bond Swap Tax break

WHY IT MATTERS????

Exploiting loopholes may lead to

intensive scrutiny and audits

Reducing our facilities

DIRECT TAX CODE

Direct Tax Code is a combination of major tax relief and removal of most tax-exempted  benefits

a document containing changes in Exemptions, Tax slab

CONTD…..

New tax slab

INCOME SCOPE TAX PERCENTAGE

LESS THAN 1.6 LACS 0%

1.6 – 10 LACS 10%

10 – 25 LACS 20%

25+ Lacs 30%

FEATURES

Exemption on Education loan

On LTA (Leave travel allowance) is abolished

Tax on dividends 5 %

Only half of Short-term capital gains will be taxed

Surcharge and education cess are abolished.

ADVANTAGES

Whole process much simpler

a new face to the Indian economy

Generate more tax revenue

reduces the corporate tax to 25% from the current 34%