The Parliamentary panel on Direct Taxes Code in its report tabled in Lok Sabha today has suggested raising the income tax exemption limit to Rs 3 lakh.
The report of Standing Committee on Finance, which scrutinized the Direct Taxes Code (DTC) Bill, will pave the way for discussions and adoption of DTC by Parliament.
DTC will replace the Income Tax Act, 1961.
The panel has also suggested that the investment limit for tax savings schemes be hiked to Rs 3.20 lakh.
In its report, the Parliamentary panel suggested that the wealth tax limit be pegged at Rs 5 crore. It also recommended abolition of the Securities Transaction Tax (STT).
As regards the corporate tax, the committee, headed by senior BJP leader and former Finance Minister Yashwant Sinha, recommended that the rate be retained at 30 per cent.
The Standing Committee also suggested that 10 per tax be levied on taxable income between Rs 3-10 lakh, 20 per cent between 10-20 lakh and 30 per cent on over Rs 20 lakh.
At present, 10 per cent tax is levied on income between Rs 1.8-5 lakh, 20 per cent on income between Rs 5-8 lakh and 30 per cent above Rs 8 lakh.
The DTC has proposed income tax exemption limit at Rs 2 lakh, 10 per cent tax for income between Rs 2-5 lakh, 20 per cent for Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
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