Higher tax bracket -read high basic tax exemption -has been recommended under amended Direct Taxes Code (DTC) Bill by Parliamentary Standing Committee on Finance. It is likely to submit its report within a week to Parliament , so that DTC bill with its recommendation can be introduced in the Budget session. It is expected that after the submission of DTC report in Parliament, the finance ministry may table the revised bill in the Monsoon session.The DTC Bill is expected to be introduced from April 1, 2013.
Key recommendations of the Parliament Standing Committee on Finance as guessed in media are :
- No tax upto Rs 3 lakh
- Total income between Rs 3 lakh and up to Rs 10 lakh : 10 %
- Total income between Rs 10 lakh and up to Rs 20 lakh : 20 %
- Total income exceeding Rs 10 Lakhs : 30 %
Apart from the high tax exemption , following recommendation are also rumoured to have been recommended by the committed
- Deduction for up to Rs 1.5 lakh for social security contributions
- Deduction for expenses on professional studies or education up to Rs 50,000 a year
- Increased deduction t on long-term savings from Rs 1 lakh a year to Rs 1.5 lakh
- Deduction for annual contribution to medical insurance up to Rs 1 lakh , besides Rs 50,000 for dependent parents.
Thus it seems that Standing Committee , by enhancing tax exemption for individuals will earn respect and fame from ordinary tax payers who are under tremendous pressure of high cost of life.
Remember , as the DTC bill is likely to be effective from 01/04/2013, the higher tax exemption can not be enjoyed in immediate future and by the time , it is implemented , the cost of living will adjust to it.