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A view about Effect of Budget on Income Tax For Financial Year 2012-13.

Year Budget Effected on Tax Policies for nest Financial Year all taxpayee knows although it more effected on Income Tax except other Tax i.e. Service Tax, Excise Tax etc. A common Man watches all on Budget every year only for projection of income and saving of tax. Some Important Changes in this Financial Year 2012-13 by Budget-2012 are as follows:
  1. Rajiv Gandhi Equity Savings scheme: It will provide income tax deduction of 50% for those who invest upto Rs.50,000 directly into equities and whose annual income is less than Rs.10 lakh, subject to a three -year lock in.
  2. Implementation of Direct tax code has again been deferred and won’t be applicable from 1st April, 2012.
  3. Exemption limit raised to Rs 2 lakhs from Rs 1.8 lakh. 30% slab now starts from 10 lakh rather than 8 lakh earlier. Men and women now have same tax slab. No gender bias.
  4. Within the existing limit for deduction allowed for health insurance, Rs 5000 deduction for preventive health checkup is allowed.
  5. Deduction of upto 10,000 for interest from savings bank accounts under a new section 80TTA. 
  6. Senior citizens not having income from business proposed to be exempted from payment of advance tax.
  7. Securities Transaction tax (STT) reduced to 0.1% from 0.125%
  8. Exemption from Capital Gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant and machinery.
  9. Service tax rate increased to 12% from current 10%. This would mean more taxes in your mobile, telephone, internet, restaurant bills and life insurance premium etc.
  10. Import duty free amount limit raised to Rs 35000 from 25000. So guys coming from abroad can bring more stuff.
  11. Gold to be more expensive. Customs duty on standard gold raised from 2 per cent to 4 per cent.
  12. Duty on large cars raised to 27%, so cars would be more expensive now.
  13. Tax saving mutual funds (ELSS) deduction to continue.
  14. 80C deduction on insurance policies purchased after 1st April, 2012 only if premium is less than 10% of sum assured. Benefit for existing purchased policies to continue.
  15. 1% TDS on any immovable property sale above 50 lakh (20 lakh in case of non-urban areas).
  16. 1% tax at source on cash purchases of jewellery over Rs 2 lakh.
  17. 80CCF deduction for infrastructure bonds not valid anymore. 
  18. Income tax return filing would be now mandatory for every resident having any asset located outside India irrespective of the fact whether the resident taxpayer has taxable income or not.
  19. 80G deduction not applicable in case donation is done in form of case for amount over Rs 10,000.

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