Panel to push for Rs 3-lakh I-T exemption limit

A Parliamentary committee scrutinising the Direct Taxes Code (DTC) Bill will recommend raising of the annual income tax exemption limit to Rs 3 lakh and hiking the limit on tax breaks for investments to Rs 2.5 lakh following a broad consensus amongst members. HT reports.

In what could come as a major relief on the tax front, the parliamentary standing committee on finance is likely to recommend raising the income tax exemption limit to Rs 3 lakh from the existing Rs 1.8 lakh.

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The move comes amid speculation that the Centre may hike the tax exemption limit to at least Rs 2 lakh in the upcoming budget.

The committee, which will meet on March 2 to adopt its report on the Direct Taxes Code Bill, plans to recommend 10% tax for those in the income bracket of Rs 3-10 lakh, 20% for Rs 10-20 lakh and 30% for income beyond Rs 20 lakh.

At present, income between Rs 1.8-5 lakh is taxed 10%, that between Rs 5-8lakh is taxed 20% while income above Rs 8 lakh attract 30% tax.