Direct Tax Code - Required further amendments

A major step has been taken with introduction of Direct Tax Code 2009. It is indeed positive for country and will go long way in changing the existing IT environment. However I envision following amendments are must for better and effective direct tax code.

1. Increase in basic exemption limit to Rs. 3 lakhs - FM has made comprehensive changes in the tax slabs for applicable rate at which tax is to be computed. However leaving aside basic exemption limit is unfavourable. Basic exemption limit should be raised from Rs. 1.6 lakhs to Rs. 3 lakhs.
2. Standard deduction for salaried taxpayers - The old standard deduction concept needs to be re-inserted for salary taxpayers. Most of the salaried class do incurr expenses which are for official purpose. In case of business class, they get deduction for every business expense. So treating the basic exemption limit at same level for both classes in absence of standard deduction is not justified. To avoid procedural and documentation hassel, salary taxpayers should be given standard deduction.
3. Transport allowance limit should be increased - Current exemption of Rs. 800 pm for transport allowance is very less in light of inflationery movements. It needs to be raised to minimum of Rs. 2,500 pm.
4. Deduction of interest repayment on housing loan should be raised - For self occupied house deduction of interest on capital borrowed is Rs. 1.5 lakh per annum. Considering rise in reality prices and average loan size for urban borrowers this again is restrictive amount. The interest deduction needs to be raised to Rs. 3 lakh
5. Tax audit applicability needs to be raised - Tax audit should be made mandatory for professional receipts in excess of Rs. 25 lakhs per annum and for manufacturing / trading business to Rs. 1 crore per annum.
6. Section 80L deduction needs to be restored - Taxing interest income on savings and fixed deposit accounts from single rupee is not tax simplification for ordinary taxpayers. There needs to be exemption upto certain amount for interest income. And actually bank savings interest is not a real source of income for most of the taxpayers, this fact should be considered.
7. Deduction limit under 80D should be increased - Medication costs and correspondingly the insurance premiums have gone up substantially in recent years. As such deduction of Rs. 15,000 or Rs. 20,000 appear low. The same need to be raised appropriately.

Do write in areas / sections where you seek scope for amendment in direct tax code.