Slab on Tax Relief to be Hiked to Rs 3 Lakh | IndiaWires

The exemption limit for income tax is likely to be hiked to Rs 3 lakh ?as against Rs 2 lakh recommended in the Direct Taxes Code Bill. The hike in tax slab is stated to figure in a draft report tabled by the Parliamentary standing committee of finance. Other recommendations that are being taken into consideration are acquitting calculations up to an annual income of Rs 5 lakh from the trouble of filing returns and price index to inflation. The Parliamentary Committee is being chaired by Yashwant Sinha, Former Minister for Finance and Bharatiya Janata Party leader.

The tax rates likely to be suggested by the committee are as follows: 10% for Rs 3 lakh to Rs 10 lakh, 20% for Rs 20 lakh and 30% above the amount of Rs 20 lakh. As many as 3 crore people will get the benefit of not having the need to file returns in case the committee?s proposal of Rs 5 lakh ceiling limit is allowed. The suggestion of indexing tax rates to inflation will remove the need to mention rates of tax, even when they remain unchanged, when budget statements are made every year by the finance minister.

The committee has taken into consideration aspects like change in evaluation of property tax. This will be done by introducing parameters for non- commercial and commercial utility. These amendments will reduce the burden on non-commercial category and also rationalize procedures and assess parameters.

The panel is also taking into consideration transforms in tax benefits meant for life insurance products, along with an enhancement of benefits. There is also likely to be a review on the scheme of limiting tax deduction to premiums that do not surpass a specific percentage of the assured sum put forth by DTC.

BJP leader Yashwant Sinha headed panel is not likely to reject the DTC bill and hopes that the government stands receptive to the suggestions they make. The DTC is one of the core reforms of the second innings of the UPA and has the sturdy backing of Finance Minister Pranab Mukherjee.

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