Finance Minister P Chidambaram on said work on the Direct Tax Code (DTC) Bill, which seeks to overhaul income tax laws, is in progress and the amended Bill will be introduced in the ongoing Budget session. Presenting the Budget, he said that the DTC is not intended to be an amended version of Income Tax Act, 1961 but a new code based on the international practices that will be compatible with the needs of a fast developing economy.

He said the Standing Committee on Finance has submitted its report on the Bill and the government attaches great weight to its recommendations. "My team in the Ministry of Finance is examining the recommendations and I intend to work with the Standing Committee and its Chairman in order to finalise the official amendments. I shall endeavour to bring the Bill back to this House before the end of the Budget Session".

Among other things, the Standing Committee headed by senior BJP leader Yashwant Sinha, had suggested raising the tax exemption tax limit to Rs 3 lakh as against Rs 2 lakh proposed in the original DTC Bill. It has also suggested that subsequent tax slabs be adjusted accordingly to provide relief to people reeling under the impact of inflation.

Chidambaram said the DTC will be a new code based on the international practices that will be compatible with the needs of a fast developing economy.

Other recommendations of the panel include hiking the investment limit for tax savings schemes to Rs 3.20 lakh and pegging wealth tax limit at Rs 5 crore. It also recommended abolition of the Securities Transaction Tax (STT). As regards the corporate tax, it recommended that the rate be retained at 30 per cent.