Tax proposals: How they will affect you

Tax proposals: How they will affect you

Last Updated: Saturday, March 17, 2012, 19:30
Comments 46  
Tax proposals: How they will affect you Zeebiz Bureau

New Delhi: Springing pleasant surprises, Finance Minister Pranab Mukherjee on Friday provided reliefs for tax payers. Higher tax exemption limit for individuals, significant benefits for senior citizens, and retention of corporate tax to its existent level were some of the major tax-related highlights of Union Budget 2012-13.

However, a 2% jump in service tax from the current 10% came as a dampener.

Revisions in Direct Tax:

Income Tax
1) Individuals:

  • Income upto Rs 2,00,000 - Nil

      • Rs 2,00,001 to Rs 5,00,000 - 10%

          • Rs 5,00,001 to Rs 10,00,000 - 20%

              • Rs 10,00,001 and above - 30%

                  2) Senior citizens:

                  The Budget proposal exempted the senior citizens from filing advance tax.

                  • Income up to Rs 2,50,000- Nil

                      • Rs 2,50,001-Rs 5 ,00,000- 10%

                          • Rs 5,00,001 to Rs 10,00,000 - 20%

                              • Rs 10,00,001 and above - 30%

                                  • Age limit for senior citizens reduced from 65-60 for several tax benefits

                                      Corporate Tax

                                      • Corporate Tax structure left unchanged

                                          • Withholding tax on certain overseas borrowings reduced to 5% from 20%

                                              • Securities transaction tax cut by 20% for stock market orders

                                                  Service Tax

                                                  • Service Tax rates raised from 10% to 12%

                                                      • To bring more businesses under Service Tax net; only 17 services exempted now

                                                          • Higher Service Tax to add Rs 186.6 bn in revenue

                                                              • Changes in direct taxes to result in revenue loss of Rs 45 bn

                                                                  Direct tax for companies

                                                                  • Surcharge for companies cut to 5%, from 7.5%

                                                                      • New revised income tax return form `Sugam` to be introduced for small tax payers

                                                                          • Minimum alternate tax raised from 18% to 18.5% of book profits

                                                                              • Service tax retained at 10%; duty exemptions to be withdrawn on various items

                                                                                  • Net loss from direct tax proposals estimated at Rs 11,500 crore for the year

                                                                                      Indirect Taxes

                                                                                      • Standard Excise duty raised from 10% to 12 %

                                                                                          • Merit Excise duty raised from 5% to 6 %

                                                                                              • Lower merit rate raised from 1% to 2 %

                                                                                                  • Lower merit rate for coal, fertilisers, mobile phones and precious metal jewellery retained at 1%

                                                                                                      • Excise duty on large cars up from 22% to 24%

                                                                                                          • Customs duty cut to 2.5% on sugarcane planter, root or tuber crop harvesting machine and rotary tiller and weeder

                                                                                                              • Customs duty cut to 5% on specified coffee plantation and processing machinery

                                                                                                                  • To extend project import benefit to green house and protected cultivation for horticulture and floriculture

                                                                                                                      • Customs duty cut to 5 % on some water soluble fertilisers and liquid fertilisers

                                                                                                                          • Customs duty cut to 2.5 % on urea

                                                                                                                              • To extend concessional import duty for Mechanised Handling Systems and Pallet Racking Systems in mandis or warehouses for horticultural produce

                                                                                                                                  • Imports of equipment for initial setting up or expansion of fertiliser projects fully exempt for three years

                                                                                                                                      • Steam coal fully exempt, concessional CVD of 1% for two years

                                                                                                                                          • Natural Gas and Liquified Natural Gas exempt

                                                                                                                                              • Uranium concentrate, Sintered Uranium Dioxide in natural and pellet form exempt

                                                                                                                                                  • Customs Duty on Mining machinery cut to 2.5%

                                                                                                                                                      • Customs Duty on Railways safety equipment cut to 7.5%

                                                                                                                                                          • Import Duty on road, tunnel boring equipment fully exempt

                                                                                                                                                              • Parts of aircraft, testing equipment and tyres exempt

                                                                                                                                                                  • Customs Duty on coating material for manufacture of electrical steel cut to 5 %

                                                                                                                                                                      • Nickel ore and concentrate and nickel oxide/ hydroxide fully exempt

                                                                                                                                                                          • Customs Duty on non-alloy, flat-rolled up at 7.5%

                                                                                                                                                                              • Automatic shuttle-less looms fully exempt

                                                                                                                                                                                  • Automatic silk reeling and processing machinery fully exempt

                                                                                                                                                                                      • Second-hand textile machinery to attract basic duty of 7.5 %

                                                                                                                                                                                          • Duty on branded ready-made garments with up at 12 %

                                                                                                                                                                                              • LCD and LED TV panels fully exempt

                                                                                                                                                                                                  • Memory card for mobile phones fully exempt

                                                                                                                                                                                                      • Duty on bicycles increased to 30%

                                                                                                                                                                                                          • Six specified life-saving drugs/ vaccines for HIV-AIDS, renal cancer etc fully exempt

                                                                                                                                                                                                              • Iodised salt to have concessional basic customs duty of 2.5%

                                                                                                                                                                                                                  • Customs Duty on Probiotics cut to 5%

                                                                                                                                                                                                                      • Solar energy equipment to be fully exempt

                                                                                                                                                                                                                          • Excise duty on LED lamps cut to 6 %

                                                                                                                                                                                                                              • Hybrid vehicle batteries to be fully exempt

                                                                                                                                                                                                                                  • Customs duty on gold bars, gold coins increased to 4%

                                                                                                                                                                                                                                      • Customs duty on non-standard gold increased to 10%

                                                                                                                                                                                                                                          • Customs duty on platinum increased to 4%

                                                                                                                                                                                                                                              • Basic duty on gold ore, concentrate and dore bars increased to 2%

                                                                                                                                                                                                                                                  • Excise duty on refined gold increased to 3 %

                                                                                                                                                                                                                                                      • Polished, coloured gem stones to attract 2% duty

                                                                                                                                                                                                                                                          • Excise duty on cigarettes to attract ad valorem component of 10% on existing rates

                                                                                                                                                                                                                                                              • Duty increased on pan masala, gutkha, chewing tobacco, unmanufactured tobacco and zarda scented tobacco in pouches

                                                                                                                                                                                                                                                                  • Cess on Crude petroleum oil increased to Rs 4,500 per metric tonne

                                                                                                                                                                                                                                                                      • Customs Duty on large cars/ MUVs/ SUVs with value exceeding USD 40,000 enhanced from 60 per cent to 75 per cent ad valorem

                                                                                                                                                                                                                                                                          • Non-branded jewellery to attract excise duty of 1%

                                                                                                                                                                                                                                                                              • Branded silver jewellery fully exempt

First Published: Friday, March 16, 2012, 13:25
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 Your comment(s) on this article
What a big deal, they have not waved off the Tax rite..... We are getting screwed on other expenditures. Just think, if they cross the limit, then all other software professions may washout their jobs, Coz onsite people can get much cheaper resources in the US or some other countries and China may utilize the budget issues. We might be thinking, how the budget effects IT/BT might...can We are paying complete earnings to the Government 1) TDS 2) VAT 3) Consumers 4)Petrol 5) Vegetables/ Groceries and now they have planning to touch on Life insurance (Blood sucking ideas)..... The day will come very soon, TDS & VAT might be implemented on the prostitution eg. 10.33% service tax, 12.3% entertainment tax , 10% TDS, 12% VAT, so overall 43% Tax only on Prostitutions. They can gather even more money/ Year. Public been quite from years and still they are quite, they have raised Rs 3 -6 more on milk, Petrol might go upto Rs 85/ liter very soon, The cost of leaving crossed more than 20-45% in 6
Praveen D - Bangalore
this year budget is not good, the rate should be high
archana - karad
We need to understand that Budget is prepared after series of discussion with experience teams. Governemnt always tries to give best part of that because of vote bank. They have to see country`s financial health also. Budget cann`t alone do anything because of high inflation. Govt needs to do something on food inflation immediately. Otherwise, budget and fiscal deficit will be worser even at future.
Amit Kar - Jamshedpur
this year the budget is not so good,the rates should be low or exemt to villege people of bijapur city .....on or low should be done on transport of bus ,railways, and local vehicles.and also in petroleum products
ambaji v.deogiri - bijapur
individual income raised 2 lakh both of male and female how should be is correct male saving more but female saving less
narayan n ari mba student - bims bagalakote
its time to go forward with high technology, new track, high speed train etc. we again looking backward with new train, price hike without any motives and planning. when our country will get a minister wholl really think about developement of railway not for the party and post development
pawan - bangalore
education cess should be charged only 2 direct or indirect and not to both the sides......price hike in car should be reduced.
vaishakhi and ronak. - vadodara
Govt should find out measures on how to abolish either of the Taxes: Direct Tax OR Indirect Tax.. As an individual, everybody is paying atleast 15% of his income as Indirect Taxes on petrol only this tax burden is around 40% including all state govt taxes. On all other things, this burden is atleast 10-12% at an average. After this 15% indirect tax, we are paying 30% Direct Taxes. That means, we are paying around 45%-50% of our income as Taxes which is very high..
Tarun Gupta - Chandigarh
For mere benefit of Rs.2060/-, Govt is levying the burden of indirect taxes atleast 10 times of this benefit on the public. Where is the Tax revenue going?? In various unknown and uncountable no of scams?? And again higher tax burden is imposed on public.
Tarun Gupta - Chandigarh
Why doesn`t the Govt gives Tax benefits on Indirect Taxes paid by the individuals?? If this is allowed, majority of the people will get bills for their purchases and this will indirectly increase the revenue of Govt as the sales figure of all the industries will shoot up which they are not actually showing.
Tarun Gupta - Chandigarh
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