House panel on DTC to meet on Feb 17

The Standing Committee on Finance on Friday postponed adoption of its report on the Direct Tax Code (DTC) as certain issues are yet to be resolved.

The meeting of the Committee chaired by senior BJP leader Yashwant Sinha considered the draft of the report on the proposed Bill at its meeting.

"The entire report needs to be discussed and the committee members felt that they should meet again before adopting the report," sources said.

Accordingly, it was decided that the Committee will meet again on February 17, 24 and March 2, they added.

The committee, according to sources, wants the government to raise the income tax exemption limit to Rs 3 lakh in view of the near double-digit inflation which has eroded purchasing power of rupee. The Bill has a provision to raise the limit to Rs 2 lakh.

Finance Minister Pranab Mukherjee had tabled the DTC Bill in Lok Sabha in August and was referred to the Standing Committee for scrutiny.

The draft report, prepared by the Committee, has also suggested categorisation of the home and commercial property for the purpose of income tax. The income from these two sources should be accorded different tax treatment, it said.

It wants the government to incorporate provisions to prevent misuse of the facilities and tax relief provided to People of Indian Origin (PIOs).

The DTC, which seeks to modernise the direct taxation system, will replace the Income Tax Act, 1961.

Although the government is unlikely to introduce the DTC from April 1, 2012, as planned earlier, it may incorporate some of the provisions of the proposed law in the Budget for 2012-13 , to be unveiled on March 16.