In order to provide the much needed relief to people, a Parliamentary panel scrutinising the Direct Taxes Code (DTC) Bill has suggested raising the income tax exemption limit to Rs 3 lakh and also hiking deduction on savings to Rs 2.5 lakh.
"The committee has adopted the report. It only needs to dot the i's and cross the t's. The report will be submitted within a week...Possible ahead of the [Budget] Session," sources said after the meeting of the Parliamentary Standing Committee on Finance held here today.
The report, which will pave the way for debate and passage of the DTC Bill by Parliament, has also suggested retaining the corporate tax rate at 30%.
It suggested there should be three tax slabs at 10%, 20% and 30% for personal income tax.
The DTC, which will replace the Income Tax Act, 1961 and modernise the direct tax structure in the country, was referred to the Committee headed by senior BJP leader and former Finance Minister Yashwant Sinha for scrutiny in August 2010.
The government, pending approval of the DTC Bill by Parliament, is likely to introduce some measures concerning taxes in the forthcoming Budget itself to be presented by Finance Minister Pranab Mukherjee in the Lok Sabha on March 16.
The Budget Session of Parliament will begin on March 12 with President Pratibha Patil addressing the joint sitting of Members of the Lok Sabha and the Rajya Sabha.
As regards the income tax exemption limit, the Committee did not favour the suggestions of some members who wanted it to be raised to Rs 5 lakh. It later reached a consensus on suggesting the limit of Rs 3 lakh, up from Rs 1.8 lakh currently.
The income tax exemption in the original DTC Bill has been proposed at Rs 2 lakh.
