The government's proposed changes have been condemned by the United Nations refugee agency.
The bill is expected to be voted on later in the month.
The United Nations High Commissioner for Refugees has slammed Denmark's planned measures on immigration, saying they could fuel fear and xenophobia.
Among the controversial changes being debated by M-Ps is a proposal to allow authorities to confiscate refugees' valuables worth over AU $2,000 (around 10,000 Danish krone) to pay for their stay.
It excludes sentimental items such as wedding rings, and goods such as mobile phones.
Denmark's centre-right minority government is toughening its stance because it depends on the support of parties to the right of centre, including the anti-immigrant Danish People's Party.
Danish People's Party MP Martin Henriksen says the changes are essential.
"We think it's necessary to limit the flow of migrants and refugees coming into Denmark and, those who are coming into Denmark, we think that it is fair that they should pay for their stay in Denmark. Why should the Danish taxpayers pay for the period of time that they are living in Denmark? So we think it's quite fair and I don't actually understand why there's been such a big debate about it. The suggestion is just common sense."
Red-Green Alliance MP Johanne Schmidt-Nielsen is critical of the plan.
"The law proposal is a law to systematically body search and examine refugees when they come to Denmark. I think it shows a great distrust to meet refugees in this way and one should remember that the vast majority have sold everything they own to make their way to Denmark. I don't think it's a good starting point for integration."
Danish Immigration Minister Inger Stojberg has defended the proposal, saying it's in keeping with a Danish norm that if you can pay for yourself, you must do so.
Mqwo is an asylum seeker from Cameroon, living in Denmark.
He says the proposed law to confiscate refugees' valuables is a bad idea.
"A problem. It is very, very bad to confiscate the valuables from refugees, because coming as a refugee in Denmark doesn't mean you don't have the right to have your own valuables. Of course people have worked in their countries and they brought all those things from their country and they brought them here and why should the government take it from them? It's really not good."
The view is echoed by Mahmoud Altamir from Syria.
"It's real injustice to take it from them, because they will think themselves like [they are] in prison if you do this."
Earlier this week Danish parties in parliament agreed to back the much-criticised planned changes to immigration laws, signalling they will be voted in easily.
Voting is expected to be held on January 26.
Denmark, which swung to the right in the last election in June, is one of several European Union countries trying to discourage migrants from seeking asylum in its territory.
The Danish government has announced it will extend temporary controls at its border with Germany for a further 20 days until February 3.
The controls were brought in earlier this month to prevent an influx of migrants after neighbouring Sweden imposed temporary controls on its borders.
More than 21,000 asylum seekers came to Denmark last year, up from around 14,800 in 2014.
The government expects around 25,000 people to claim asylum this year.
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