Union Budget 2012-13: IT exemption limit raised to Rs 2 lakh

Agencies

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%

 

 

 

 

 

 

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Service tax retained at 10%; duty exemptions to be withdrawn on various items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 rate of central exercise duty maintained at 10%; no change in CENVAT rates

 

Nominal 1% central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.

 

Peak rate of customs duty maintained at 10% in view of the global economic situation

 

Basic customs duty on agricultural machinery reduced to 4.5% from 5%.

 

Service tax net widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests

 

Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be 10% flat

 

Excise and customs duty proposals to result in net gain of Rs 7,300 crore