The government will come up with a modified Direct Taxes Code (DTC) Bill after incorporating the suggestions of the Standing Committee on Finance which, among other things, has suggested raising the annual income tax exemption limit to Rs. 3 lakh.

"We will come out with a modified DTC in response to the standing committee suggestions," said Parthasarathi Shome, Advisor to the Finance Minister, at a FICCI event. He said the Finance Ministry is looking at the DTC Bill and working on tax structures as suggested by the parliamentary committee.

The committee, headed by senior BJP leader Yashwant Sinha, in its report (March 2012) had suggested raising the annual income exemption tax limit to Rs. 3 lakh as against Rs. 2 lakh proposed in the original DTC Bill. The current tax exemption limit is Rs. 1.8 lakh.

It has also suggested that subsequent tax slabs be adjusted accordingly to provide relief to people reeling under the impact of inflation. The DTC will eventually replace the over five decade-old Income Tax Act.

"We are trying to see what could be the best in terms of transparency so that issues that are hurting industry could be covered adequately," Mr Shome said. He further said that the finance ministry is also addressing the issue of expenditure control and that remains a major challenge.

"We are looking into expenditure efficiency. We should do more in terms of efficiency. The issues on expenditure side is being addressed. Expenditure control is a major challenge and is being addressed by the Finance Minister," he said.