Budget 2012 presented by Pranab Mukherjee though largely perceived to be a non-event, has some sops for the individual investor.
- More disposable income in the hands of the individual investor through favourable revision of the income tax slabs.
The basic exemption limit has been increased from Rs 1.8 lakh to Rs 2 lakh for all individuals under age 60.
Taxable income between Rs 8 lakh – Rs 10 lakh earlier taxed at 30 % will now be taxed at 20% which means extra savings of Rs 20,000/- for those in this income bracket.
Income Tax Rate Income Tax Rate
Upto Rs 1.8 lakh NIL Upto Rs 2 lakh NIL
Rs 1.8- Rs 5 lakh 10 % Rs 2 – Rs 5 lakh 10 %
Rs 5 – Rs 8 lakh 20 % Rs 5 – Rs 10 lakh 20 %
Above Rs 8 lakh 30 % Above Rs 10 lakh 30 %
- Senior citizens (above age 60) are now exempted from paying advance tax if they do not earn any income from business or profession.
- A new scheme called the Rajiv Gandhi Equity Savings Scheme to be introduced where individuals with an income below Rs 10 lakh can get 50 % tax deduction on direct equity investments up to Rs 50,000.
- Savings Bank interest up to Rs 10,000 to be exempt from income tax for individuals and HUF.
- Rs 5000 tax deduction ( included in overall limit of Rs 15000 u/s 80 D ) for individuals who go for preventive health check up.
Now for the bad part !!!
- Increase in service tax rate from 10% to 12%.
- Beginning October 2012, sale of residential properties in urban areas over Rs 50 lakh will attract 1 % tax deduction at source.