Ahead of the Budget, a Parliamentary panel that scrutinised the Direct Taxes Code (DTC) Bill has suggested that income tax exemption limit be raised to Rs 3 lakh per annum, and the investment limit for tax savings schemes be hiked to Rs 3.20 lakh.
In its report, which was submitted to the Lok Sabha Speaker Meira Kumar today, the Standing Committee on Finance suggested that the wealth tax limit be pegged at Rs 5 crore, while the Securities Transaction Tax (STT) be abolished.
As regards the corporate tax, the Committee, which is headed by senior BJP leader and former Finance Minister Yashwant Sinha, recommended that the rate be retained at 30%.
The report will pave the way for debate and passage of the DTC Bill, which seeks to replace the Income Tax Act, 1961, by Parliament.
Following are the recommendations of the panel:
* Raise I-T exemption limit to Rs 3 lakh from Rs 1.8 lakh
* Levy 10% tax on income between Rs 3-10 lakh
* 20 pc on income between Rs 10-20 lakh, 30% above Rs 20 lakh
* Senior citizen benefits from 60 years instead of 65 years
* Raise tax rate on life insurance cos to 15% from 12.5%
* Retain corporate tax rate at 30 pc
* Remove Securities Transaction Tax (STT)
* Hike tax savings schemes limit to Rs 3.2 lakh,from Rs 1.8 lakh
* Raise wealth tax limit to Rs 5 crore from Rs 30 lakh