BUDGET HIGHLIGHTS 2012-13
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BUDGET HIGHLIGHTS-2012-13 D.T 16/03/2012
Following are some of the key highlights of the Union Budget 2012-13, presented by Finance Minister Pranab Mukherjee in the Parliament on Friday 16thMarch, 2012
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GENERAL CHANGES ARE AS UNDER
- GDP growth to be 7.6 per cent during 2012-13.
- Subsidy expenditure to be checked and higher tax revenues targeted.
- Rs.30,000 crore to be raised from disinvestment.
- To allow qualified foreign investors in Indian corporate debt market.
- To allow external commercial borrowing (ECB) to finance working capital needs of airlines for 1 year.
- To allow external commercial borrowing for power, housing, road and construction companies.
- To allow qualified FII into domestic corporate bonds
- Withholding Tax on ECB borrowings reduced from 20% to 5% for power, airlines, roads, bridges, affordable houses & fertilizer sectors.
- Allocation of Rs.15,890/- crores for recapitalization of PSU banks
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MAJOR CHANGES IN THE AREA OF DIRECT TAXATION ARE AS UNDER:-
- Implementation of Direct Tax Code has been deferred.
- Basic exemption limit for individual has been increased from 1.80 lakh to 2.00 lakh.
- Increased the limit to Rs.10 lakh under 20% tax slab from Rs.8 lakh
i.e Individual will have to pay 10% tax on income between Rs.2 lakh and 5 lakh;20% between Rs.5 lakh and Rs.10 lakh;and 30% for above Rs.10 lakh.
- Exemption upto Rs.10,000/- of Interest from saving bank accounts.
- Introduction of New Equity Scheme called Rajiv Gandhi Equity Saving Scheme under which 50% tax deduction for whose annual income is below 10 lakh and who invest upto Rs.50,000/- in equity market subject to 3 year lock in.
- Turnover limit for compulsory tax audit for SMEs raised from 60 lakh to 1 crores.
- Senior citizen to be exempt from advance tax payment.
- No change in Corporate Tax rates.
- Reduction in STT rates from existing 0.125% on delivery based turnover in the cash segment to 0.10%.
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MAJOR CHANGES IN THE AREA OF INDIRECT TAXATION ARE AS UNDER:-
- GST to be operational by August 2012.
- Rate of service tax has been increased from 10% to 12%.
- School education exempt from service tax.
- Some Infra Construction services exempt from service tax.
- All services to attract service tax except those 17 services in the negative list.
- Common tax code for service tax and excise.
- Standard Excise duty raised to 12% from 10%.
- Branded Silver Jewellery fully exempt from excise duty.
- 12% excise duty imposed on branded retail garments.
- Custom duty on gold increased to 4% from 2%.
- Import of Aircraft parts exempt from basic custom duty.
- Mobile phone parts exempted from basic custom duty.
- LCD and LED panels exempted from custom duty.
SUMMARY OF BUDGET 2012
The Budget 2012 has been lacklustre. It focused on domestic demand driven growth recovery; create condition for rapid revival of high growth in private investment; address
supply bottlenecks in agriculture, energy and transport sectors particularly in coal,power,national highways, railways and civil aviation. It has not showered much additional benefits to the individual assessee.
Thanking You,
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