Parl panel agree to raise I-T exemption limit

Parl panel agree to raise I-T exemption limit

By: || Updated: 24 Feb 2012 05:18 AM


New Delhi: Ahead of the
Budget, a key Parliamentary panel scrutinising the Direct Taxes Code (DTC)
is likely to recommend raising of income-tax exemption limit to Rs 3 lakh
and tax breaks on investments to Rs 2.5 lakh.

“There is a
consensus among the members that annual tax exemption limit be raised to
Rs 3 lakh,” sources said after the meeting of the Parliamentary Standing
Committee on Finance chaired by senior BJP leader, Mr Yashwant Sinha.

Raising
the tax exemption limit from Rs 1.8 lakh currently, they said, was
necessary to provide relief to the people braving the impact of high
inflation.

Members also felt that the total tax-saving deduction
limit, which include investments in provident fund, life-insurance,
children education and infrastructure bonds, should be raised to Rs 2.5
lakh from Rs 1.2 lakh, the sources said.

At present, investments
up to Rs 1 lakh in specified instruments are deducted while calculating
the tax liability. In addition, investments up to Rs 20,000 in
infrastructure bonds are also exempted from tax.

The Standing
Committee on Finance has decided to finalise its report on DTC by March 2,
enabling Parliament to consider the reforms in direct tax regime in the
Budget session beginning March 12.

“The committee will present
its report to Parliament in the third week of March,” the sources said.

The
DTC Bill proposes the tax exemption limit of Rs 2 lakh and also provides
for revising the tax slabs for all the three categories.

Currently,
income of Rs 1.80-5 lakh attracts 10 per cent tax, Rs 5-8 lakh 20 per cent
and above Rs 8 lakh, 30 per cent.

The DTC, which will replace the
Income Tax Act, 1961, was referred to the committee for scrutiny in August
2010.

Yesterday, Congress leaders in their wish-list asked the
Finance Minister, Mr Pranab Mukherjee, to present a “please all”
Budget and raise the income-tax slabs.





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