Union Budget 2012-2013 - Tax Proposals
The following are some of the budget proposals prepared based on the budget speech by the Finance Minister.
• Baggage allowance for people of Indian origin increased from Rs 25,000 to Rs 35,000 and for children from Rs 12,000 to Rs 15,000.
• Tax assessment re-opened for 15 years for overseas assets.
Direct Tax Proposals
• Personal tax: Exemption limit for individuals increased from Rs 1,80,000 to Rs 2,00,000.
- Income up to Rs 2 lakh - Nil
- Rs 2-5 lakh - 10%
- Rs 5-10 lakh - 20%
- Rs 10 lakh and above - 30%
Since there is no other announcement, the income rates applicable for women and senior citizens are unknown. Please wait for more information and announcements.
• Exemption on interest from savings bank accounts up to Rs 10,000.
• Tax exemption of up to Rs 5,000 for health insurance towards annual preventive check-up.
• Dividend repatriation for foreign companies extended by a year.
• Securities Transaction Tax reduced to 0.1% for delivery-based transactions.
• Compulsory reporting requirement for companies with assets abroad.
• No change in corporate tax rate.
• Service tax increased from 10% to 12%.
• Excise duty increased from 10% to 12%.
• Basic custom duty remains at 10%.
• All services except 17 in the negative list to be brought under the service tax net.
• Gold jewellery not bearing a brand name to be included in the 1% levy on precious metal jewellery.
• Doubled custom duty on refined gold.
• DTC Implementation deferred.
• Cars to cost more - Excise tax on cars raised, small cars at 12% from 10%; large cars at 24% from 22%.
• Exempts LCD, LED panels from Customs duty.
• Branded silver jewellery exempted from Customs duty.
• Use of PAN in both direct and indirect taxes as a preparation towards GST rollout.
• DTC implementation deferred.
• To encourage investment in the infrastructure sector, tax-free bonds of Rs 60,000 crore for the next fiscal. Of this, Rs 10,000 crore each for NHAI, IRFC, IIFCL, Power; Rs 5,000 crore each for HUDCO, NHB, SIDBI, and Ports.
• PPP schemes for 2,500 schools announced.
• A new equity savings scheme named after Rajiv Gandhi will provide for income tax deduction of 50% for those who invest Rs. 50,000 in equity and whose annual income is less than Rs. 10 lakh.
• Senior citizens need to pay Advance Tax subject to certain conditions (more details awaited).
• Salaried employees having an annual salary up to 500,000 and bank interest up to 10,000 need not file tax returns.
Best Regards