Budget 2011: Raise income tax exemption limit to Rs 2 lakh; says Yashwant Sinha
However, under the the DTC Bill, which was introduced in Parliament last year, the I-T exemption limit is proposed at 2 lakh.
By PTI |
NEW DELHI: Standing Committee on Finance Chairman Yashwant Sinha today suggested raising the income tax exemption limit from Rs 1.6 lakh to Rs 2 lakh in the Budget apparently to provide relief to common man reeling under the impact of high inflation.
"...he (the Finance Minister) should introduce some of the provision which are part of the DTC, like raising exemption limit," Sinha told PTI in an interview.
When asked whether it should be raised to Rs 2 lakh, as proposed in the Direct Taxes Code (DTC) Bill, the Former Finance Minister remarked: "Whatever is in DTC."
Inflation continues to be a concern for the common man as well as the government.
While the food inflation had touched 18.32 per cent in December, 2010, before moderating to over 11 per cent this month, the overall inflation still stood above eight per cent as against the comfort level of 5-6 per cent.
Presently, income up to Rs 1.6 lakh per annum is exempt from tax for individuals. For women and senior citizens, the limit is 1.9 lakh and 2.4 lakh, respectively.
However, under the the DTC Bill, which was introduced in Parliament last year, the I-T exemption limit is proposed at 2 lakh.
Under the bill, the government seeks to widen tax slabs to levy 10 per cent rate on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
The DTC, which would replace the Income Tax Act, is slated to come into effect from April next year.
"The DTC is with the committee but that should not prevent the FM from introducing in this Finance Bill some of the more acceptable non controversial provision of DTC," Sinha added.
He said the saving exemption limit, which is currently pegged at Rs 1 lakh, should also be raised.
"There is a case for going for a larger limit of exemption of savings, which is today limited to Rs 1 lakh," the Former Minister said.
Finance Minister Pranab Mukherjee is slated to present the Union Budget on February 28.
"...he (the Finance Minister) should introduce some of the provision which are part of the DTC, like raising exemption limit," Sinha told PTI in an interview.
When asked whether it should be raised to Rs 2 lakh, as proposed in the Direct Taxes Code (DTC) Bill, the Former Finance Minister remarked: "Whatever is in DTC."
Inflation continues to be a concern for the common man as well as the government.
While the food inflation had touched 18.32 per cent in December, 2010, before moderating to over 11 per cent this month, the overall inflation still stood above eight per cent as against the comfort level of 5-6 per cent.
Presently, income up to Rs 1.6 lakh per annum is exempt from tax for individuals. For women and senior citizens, the limit is 1.9 lakh and 2.4 lakh, respectively.
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However, under the the DTC Bill, which was introduced in Parliament last year, the I-T exemption limit is proposed at 2 lakh.
Under the bill, the government seeks to widen tax slabs to levy 10 per cent rate on income between Rs 2 lakh and Rs 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh.
The DTC, which would replace the Income Tax Act, is slated to come into effect from April next year.
"The DTC is with the committee but that should not prevent the FM from introducing in this Finance Bill some of the more acceptable non controversial provision of DTC," Sinha added.
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He said the saving exemption limit, which is currently pegged at Rs 1 lakh, should also be raised.
"There is a case for going for a larger limit of exemption of savings, which is today limited to Rs 1 lakh," the Former Minister said.
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Finance Minister Pranab Mukherjee is slated to present the Union Budget on February 28.
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