Highlights of union budget 2012

Finance Bill 2012

·         Slab rates for Individuals:   Income upto Rs        Income tax
2 lacs            –               NIL
2lacs -5lacs  –              10%
                                                      5lacs-10 lacs –     20%
Ø  10 lacs   –                30%
·         Rate of Service tax                                       –                 12%
·         Amendment to Sec.80C          :  LIC premium paid should not exceed
                 10% of Sum Assured of the policy.
·         80CCF                                      :  not available for AY 2012-13
·         Rajiv Gandhi Equity Savings Scheme :  Deduction upto 50% of amount invested in the scheme.
                                 Lock-in period                 :   3 years
                            Maximum deduction   : Rs 50,000/-
·         80D                                                :  Rs.5000/- is allowed for preventive health check-up within the overall limit allowed under the section.
·         Donations                                     :   made in cash is not allowed as deduction if it exceeds Rs. 10,000/- in cash.
·         New Section 80TTA                     :   Interest on Savings deposit accounts in Banks / post offices is exempt upto Rs.10,000/-
·         Investment received by an enterprise from a Private financing source may be deemed as income.
·         Overseas transfer of assets that takes place with underlying real assets in India in exceptional cases can be reopened within a time limit of past 6 years.
·         Amendment to TDS provisions: 
Ø  Transfer of immovable property other than agricultural land is brought within the TDS ambit. Transferee of immovable property is now required to withhold tax of 1% of consideration. Such withholding is required only if consideration exceeds Rs.50 lakh in urban area and Rs.20 lakh in case of property located in any other area. There is no exemption from this to individuals. The registration of the transfer is subject to submission of proof of payment of TDS. This amendment will be applicable from October 1st this year.
Ø  Every seller of bullion and jewellery would have to collect tax at the rate of 1% of sale consideration from every buyer of bullion and jewellery if the sale consideration exceeds Rs.2lakh and the sale is done In cash. This would be irrespective of the fact whether the buyer is a manufacturer,trader or purchase is for personal use.
·         Amendment to Transfer Pricing Regulations:    The proposed transactions which will come under the expanded tax net would be:
§  Payment of any expenditure related to goods,services or facilities made to related party (as defined u/s40A(2)(b)) ;
§  Any transfer of goods or services from eligible business to other business or vice versa(as defined u/s 80A,80-IA, chapter VI or section 10AA of subsection (8)/(10) or;
§  Any other transaction as may be prescribed by the CBDT.
·         Excise  Duty                                   1% excise duty on unbranded precious metal jewellery is proposed .