The Finance Ministry is not willing to accept the recommendation made by PSC (Parliamentary Standing Committee) to increase the basic tax exemption up to Rs. 3 lakh. Finance ministry says that it will loss annually around Rs. 60000 crore to the exchequer.
The parliamentary standing committee recommendation on income tax slabs was as under.
Up to 3 Lakh- Nil
300001 to 10 lakh- 10%
1000001 to 20 lakh-20%
Above 20 lakh- 30%
It also recommended to reduce the age for tax exemption for senior citizen from 65 to 60 which approved by the finance ministry.
"The recommendation is not acceptable as it will result in huge revenue loss. The total revenue loss on account of recommended changes in PIT slabs and removal of cess works out to Rs 60,000 crore approximately," said the proposed Direct Taxes Code - 2013, released today.
The finance Ministry said that these recommendations to increase the tax slabs up to 3 Lakh were not in harmony with the taxation policy.
The current income tax slabs are as under.
Up to 2 Lakh- Nil
200001 to 5 lakh-10%
500001 to 10 lakh-20%
Above 10 Lakh-30%
The finance Ministry is willing to levy additional income tax on super rich as individual and H.U.F. having income more than 10 crores need to give 35% as income tax. This is for overall prosperity of the country to add a fourth slab in income tax slabs. The ministry said.