There was a lot expected from Union Budget 2012 on tax rates and income tax slabs. However, the Union Budget 2012 disappointed people on that front.
Tax Rates and Tax Slabs:
- Income-tax rates remain unchanged for individuals.
- 30% tax bracket is now increased to Rs 10,00,000 and above. Earlier, it was at Rs 8,00,000 and above.
- In order to bring the provisions of the Finance Bill closer to those of the Direct Taxes Code (‘DTC’), the Finance Minister has done away with the distinction between ‘men’ and ‘women’ in so far the income exempt from tax is concerned. Both men and women have now been brought under "General" category with income up to Rs 2,00,000 exempt from taxes.
Interest from Savings Bank Accounts:
A deduction of up to Rs 10,000 has been proposed for interest from savings bank accounts. This would help a large number of small taxpayers with salary incomes up to Rs 5,00,000 and having interest income from savings bank accounts up to Rs 10,000 as they would not be required to file income tax returns.
Preventive Health Checkup:
A deduction of Rs 5,000 for preventive health checkup.
Long Term Infrastructure Bonds:
Additional deduction of Rs 20,000 for investment in long-term infrastructure bonds under section 80ccf as notified by the Central Government has now been removed.
Net Tax Savings:
Since both men and women have now been brought under "General" category with income up to Rs 2,00,000 exempt from taxes, savings for individual taxpayers is proposed to be as follows:
Taxable
Income
|
Men
|
Women
|
Post budget saving
|
Post budget saving
|
|
180,000
|
-
|
-
|
190,000
|
1,030
|
-
|
200,000
|
2,060
|
1,030
|
250,000
|
2,060
|
1,030
|
300,000
|
2,060
|
1,030
|
500,000
|
2,060
|
1,030
|
600,000
|
2,060
|
1,030
|
800,000
|
2,060
|
1,030
|
900,000
|
12,360
|
11,360
|
1,000,000
|
22,660
|
21,660
|
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