Finance Ministry rejects proposal to raise IT Exemption limit for salaried class

Finance Ministry rejects proposal to raise IT Exemption limit for salaried class

The Finance Ministry has rejected the recommendation of the Parliamentary Standing Committee, headed by former FM Shri Yashwant Sinha, on raising the income tax exemption limit to Rs. 3 lakh. The recomendation was made as part of the Committee's report on the Direct Taxes Code (DTC). Adjusting the slabs will cause tax revenue losses to the tune of Rs. 60,000 crore a year to the Exchequer, the Ministry has said.  It has, however, agreed to the recommendation on reducing the age for tax exemption for senior citizens from 65 years to 60 years. The Ministry has also rejected the recommendation on inflation-proofing the tax exemption. 

              The Parliamentary Committee had proposed no tax on income upto Rs. 3 lakh per annum; at the rate of 10 per cent for Rs. 3-10 lakh; 20 per cent for Rs. 10-20 lakh; and 30 per cent on annual income beyond Rs. 20 lakh. AT present there is no tax on income upto Rs. 2 lakh per annum. Income of Rs.2 to 5 lakh attracts tax at the rate of 10 per cent, 20  per cent on Rs. 5-10 lakh and 30 per cent on income beyond Rs. 10 lakh.