Budget 2012 - Direct Taxes

This article provides a brief overview of budget proposals 2012 and its implications. 

Individual Tax Payers

Basic exemption limit extended by Rs.20,000 to Rs.2,00,000.  For women exemption limit extended by Rs.10,000 to Rs.2,00,000.  No increase for senior citizens to remain at Rs.2,50,000.

Tax slabs have been slightly changed to extend the rate of 20% upto Rs.10 lacs.  The revised rate slab is as follows.

           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%

80C - There is no change 

80D - In addition to the current benefits expense upto to Rs.5,000 on Medical Preventive Health check-up is allowed

80DDB - Senior Citizen age reduced to 60 years from current definition of 65 years

80TTA - Interest received from Savings Bank Account exempt upto a value of Rs.10,000

A new condition has been introduced in 80C as regards insurance premium.  Deduction under section 80C for insurance is allowed only to an extent of 10% of the capital sum assured.

Section 80CCF - infrastructure bond has been withdrawn from tax deduction

Corporate Tax Payers

No change in corporate rate of 30% for domestic companies and 40% for foreign companies. 

No change in Dividend Distribution tax (DDT) rates, remains @ 15% + 7.5% surcharge + 3% Cess (effective rate 16.60875%)

No change in MAT rate of 18.5%

Section 115JC - AMT (Alternate Minimum Tax) of 18.5% applicable to a person other than a company.