Copy of draft DTC Bill silent on tax rates: Sources

The draft DTC Bill being studied by the cabinet is silent on all the tax rates. However, four new changes have been made to the bill on tax deducted at source, reports CNBC-TV18's Nayantara Rai.

Later in the evening the cabinet will be meeting to approve the Direct Tax Code Bill that has been circulated by the finance ministry to all the key ministries.

CNBC-TV18 learns that the copy of the draft bill is silent on all tax rates, including individual income tax rates, key corporate tax or wealth tax, minimum alternate tax or MAT etc. These rates are likely to be decided only when the Bill is tabled in parliament if it is later approved today evening.

Four key changes have come out as regards tax deducted at sources in its first draft. Mutual fund income, which has been added to the new draft DTC Bill, will attract a TDS of 10% in the case of HUFs (Hindu Undivided Families) or individuals. For other deductees, it has been set at 20%. The other key addition is related to life insurance payments which attracts a 10% TDS in case of HUFs and individuals and 20% for all other deductees.

Payments made for works and service contracts, payment of labour supply and advertising, in those the TDS rates have been doubled from 1% to 2%. TDS on rent for use of plant and machinery and other equipment has been doubled to 2%.

The draft bill which has been circulated comprises 20 chapters and 22 schedules and is 359 pages long.