The government will come up with a modified Direct Taxes Code (DTC) Bill after incorporating the suggestions of the Standing Committee on Finance, which among things had suggested raising annual income tax exemption limit to Rs 3 lakh.
“Will come out with modified DTC (Bill) in response to Standing Committee suggestions,” said Advisor to the Finance Minister Parthasarathi Shome at a FICCI event here.
He said the Finance Ministry is looking at the Bill and working on tax structures as suggested by the Parliamentary committee.
The Parliamentary panel headed by senior BJP leader Yashwant Sinha in its report (March 2012) had suggested raising the annual income exemption tax limit to Rs 3 lakh as against Rs 2 lakh proposed in the original DTC Bill. Current tax exemption limit is Rs 1.8 lakh.
It has also suggested that subsequent tax slabs be adjusted accordingly to provide relief to people reeling under the impact of inflation. The DTC will eventually replace the over five decades old Income Tax Act.
“We are trying to see what could be the best in terms of transparency so that issues that are hurting industry could be covered adequately,” Shome said.
He further said the Finance Ministry is also addressing the issue of expenditure control and that remains a major challenge.
“We are looking into expenditure efficiency. We should do more in terms of efficiency. Issues on expenditure side is being addressed. Expenditure control is a major challenge and is being addressed by the Finance Minister,” he said.
The DTC Bill, tabled in August 2010, was referred to the Standing Committee for scrutiny.
Shome also said there has been some improvement on the government’s non-plan expenditure side since the time of financial crisis in 2008.
Finance Minister P Chidambaram had in November 2012 announced a fiscal consolidation road map wherein he plans to restrict fiscal deficit at 5.3 per cent of GDP in the current fiscal and bring it down to 3 per cent by 2016-17.
Shome further said that the government is showing its intention to bring in clarity in tax laws and reforms in tax administration.
“We have to increasingly do so (tax reforms). That is going to be a vehicle and we won’t put it on back burner,” Shome said.
He also said the Ministry has asked National Institute of Public Finance and Policy (NIPFP) to calculate the impact of the proposed Goods and Services Tax (GST) on the GDP.
There should be no income tax up to 5 lacs because only mideal class people is Income tax regularly i.e. who is working on monthly Salary basis. Hence required Income Tax exemption up to 5 lacs for employes
dear sir,
the exemption limit for senior citizen should be raised to Rs.3.5 lacs and 3.51 lacs to 7.00 lacs at 10 per cent can be collected as i.t.. the 80c can be increased to 2.00 lacs.
yours faithfully,
m.sreenivasan
They say present tax limit is 1.8 lakhs. but itshoud be 2 lakhs know.?
Hay Govt is looking for medium class family.
As for relief for Medical expenses that should not be any restriction as to the nature of disease or necessity to get certificate of Medical officer. At best the department may insist on production of purchase bills in the name of patient. Getting the bills attested/certified by the Medical officers are costly and time consuming and may not yield the desired benefits to the asses-sees.
Provision of higher exemptions to Senior Citizens above 80 years may have to be considered for revision to 75 years, as there is a long gap of 15 years between 60 years and 80 years.
Whatever Govt wants to do, are all in planning stage for quite sometime and nobody knows when the proposed changes are going to take place. Some of the issues which need immediate attention are (a) bringing back standard deduction for salaried employees, (b) increasing limit for domiciliary medical expense above Rs 15000 per annum, (c) increasing 80C limit, (d) social security measures, (e) removal of presumptive taxation on second self occupied house propoerty in same locality, etc.
there shud be no income tax upto 10 lacs income above 1o lacs 25%
FM should consider linking Income tax slab rates to CPI in DTC.