Ahead of the Budget, some members of a Parliamentary panel scrutinising the Direct Taxes Code Bill on Friday pressed for raising the Income Tax exemption limit to Rs. 5 lakh per annum.

The Standing Committee on Finance, which met under the chairmanship of senior Bharatiya Janata Party leader Yashwant Sinha, has decided to finalise its report by March 2, 2012 enabling Parliament to consider the ambitious reforms in direct tax regime.

“The Committee will meet again on February 24 and finalise the report on the DTC Bill by March 2,” sources said.

Some members, they said, “wanted the IT exemption limit to be increased to Rs 5 lakh per annum in view of inflation and erosion in purchasing power of rupee.”

The government is hoping for approval of the DTC Bill by Parliament in the next fiscal. Pending Parliamentary nod, the government may include some of its provisions of the Bill in the budget to be presented on March 16, 2012.

The Committee, in its draft report, has suggested that the income tax exemption threshold be enhanced to Rs. 3 lakh per annum from the current Rs. 1.8 lakh. The Bill proposes the limit of Rs. 2 lakh and also provides for revising the tax slabs for all the three categories.

Currently, income of Rs. 1.80-5 lakh attracts 10 per cent tax, Rs. 5-8 lakh 20 per cent and above Rs. 8 lakh, 30 per cent.

It had also proposed retaining the corporate tax rate at the existing 30 per cent.

The DTC, which will replace the Income Tax Act 1961, was referred to the Standing Committee for scrutiny after introduction in Lok Sabha on August 2, 2010.

More In: Economy | Business | News | National