Panel for raising I-T exemption limit

Panel for raising I-T exemption limit

On Direct Tax Code Bill, the parliamentary panel on Friday, recommended raising the annual income tax exemption limit to Rs 3 lakh from the present Rs 1.80 lakh.

It also recommended hiking the limit on tax breaks for investments to Rs 2.5 lakh, instead of Rs 1 lakh. The DTC Bill, which seeks to replace the archaic Income Tax Act, 1961, aims at reducing tax rates by expanding the tax base and minimising exemptions.

It has already missed two deadlines of its implementation as the standing committee took a long time to pass the Bill.

Now, that a broad consensus has emerged between the members on the exemption limit, the Bill might see the light of the day sometime next year, analysts say.

The Standing Committee on Finance has decided to finalise its report on DTC by March 2, enabling Parliament to consider the ambitious reforms in direct tax regime in the Budget session beginning March 12, a source in the Yashwant Sinha-led committee said.

Second meeting

This was the second review meeting conducted by the DTC panel and economy watchers said that the standing committee moving at such a fast pace on this crucial reform indicated the Finance Ministry will be able to come up with a formal announcement as to when the DTC will finally come into play.

Finance Ministry sources said the provisions like Controlled Foreign Corporation and General Anti-Avoidance Rules may be announced in this year’s Budget, in case, there’s a delay in bringing out the DTC Bill.