New Delhi, Aug. 30: Income tax has buried gender bias but women are unlikely to celebrate.

Neither men nor women will pay tax on incomes up to Rs 2 lakh, according to a direct tax code bill tabled by finance minister Pranab Mukherjee today.

Earlier, the tax-free threshold was Rs 1.6 lakh for men and Rs 1.9 lakh for women. The gender bias in tax rates was introduced in the early nineties when Manmohan Singh was finance minister.

The new bill will come into effect from April 1, 2012, which means the deadline for implementation is being pushed back by a year.

Under the new legislation that seeks to overhaul direct tax laws, men will get a 25 per cent increase in the tax-free threshold while women will get a measly 5.26 per cent.

Senior citizens will also get a modest 4.16 per cent increase in the tax-free threshold from Rs 2.4 lakh at present to Rs 2.5 lakh. But retirement benefits and pension savings won’t be taxed.

The bill will now go to a parliamentary panel for scrutiny. “It will allow everyone to understand the provisions before the legislation comes into effect,” divestment secretary Sunil Mitra said.

The new code will impose 10 per cent tax on incomes between Rs 2 lakh and Rs 5 lakh, 20 per cent on incomes between Rs 5 lakh and Rs 10 lakh and 30 per cent on incomes above Rs 10 lakh, regardless of the gender of the taxpayer.

After the rejig, people earning between Rs 2 lakh and Rs 5 lakh will be able to save Rs 7,660 a year, those earning between Rs 5-10 lakh would save up to Rs 21,540, and those earning more than Rs 10 lakh may save up to Rs 41,040 in tax payments, officials from accounting and consulting firm Deloitte Haskins & Sells said.

The code allows income tax exemption on investments of up to Rs 1 lakh in approved funds such as public provident fund. It also proposes exemption of up to Rs 50,000 on investments made in insurance, including health cover, and tuition fees for children.

The government will lose over Rs 53,000 crore in tax revenue on account of the changes.