Final report on Income tax submitted by Parliamentary Committee

The parliamentary panel of Parliamentary standing committee on finance headed by former FM Shri Yashwant Sinha has submitted its final report to help the government push the DTC on Friday 09th March, 2012.  The following main suggestions for salaried person are extracted from panel’s report:-

  • Suggested Tax Slabs are:

          0 – 3,00,000 ————————- Nil
          3,00,000-10,00,000 —————– 10%
          10,00,000-20,00,000 —————- 20%
          20,00,000 onward ——————- 30%

  • The exemption limit for savings be enhanced from Rs 1 lakh to Rs 1.5 lakh.
  • The exemption limit for health insurance to Rs 1 lakh
  • Separate deduction of Rs 50 thousand for higher education 
  • Additional exemption of Rs 20 thousand for medical insurance for elderly parents and grandparents.
  • Silent on housing loan exemption.
  • Senior citizen cut-off age to be lowered from 65 years to 60 years.
  • Income Tax slab/exemption limit should be indexed to inflation/consumer price indices.

By increasing the cut off to Rs. 3 lakh over 2.5 crore of the 3.3 crore tax payers would go out the tax range.

Govt data suggests that 89% of the taxpayers are up to Rs.5 lakh bracket with collections estimated at around Rs. 11 thousand crore.

As per Assocham survey conducted between 500 employees, working in sectors like manufacturing, IT/ITeS, power and FMCG, from cities including Delhi, Mumbai, Kolkata, Chennai and Pune over 89% are in favour of increasing the Income Tax limit to 3 Lakh

      As per news sources while the DTC Bill is pending in Parliament, the new law is unlikely to be in place by April when the next financial year begins. As a result, the proposed slabs, if accepted by the government and endorsed by the legislature, will only be applicable from April 2013.

Source: various news article.