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Wednesday, July 25, 2012

Features of Finance Bill, 2012

Important Features of Finance Bill, 2012

Direct Taxes

1. Tax Slab for Individual below 60 years of age (Male or Female) & HUF Income Tax Rate

  • 0 - 2,00,000 Nil
  • 2,00,001 - 5,00,000 10%
  • 5,00,001 - 10,00,000 20%
  • More than 10,00,000 30%

2. DTC deferred further. 

3. Proposed to introduce GST from August 2012 

4. Proposal to allow individual or HUF, a deduction of up to from savings bank account interest.

5. Proposal to allow deduction of up to 5,000 for preventive health check up. 

6. Senior citizens not having income from business proposed to be exempted from payment of advance tax. 

7. Proposal to extend weighted deduction of 200% for R&D expenditure in an in-house facility for a further period of 5 years beyond March 31, 2012. 

8. Proposal to provide weighted deduction of 150% on expenditure incurred for agri-extension services. [Sec. 35CCC]

9. Proposal to extend the sunset date for setting up power sector undertakings by 1 year for claiming 100% deduction of profits for 10 years. 

10. Turnover limit for compulsory tax audit of account is  1 crore for business assessee and 25 lakh for professional assessee. [Sec. 44AB]

11. Exemption from Capital Gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant and machinery. 

12. Proposal to provide weighted deduction at 150% of expenditure (not being expenditure in the nature of cost of any land & Building) incurred on skill development in manufacturing sector. [Sec. 35CCD] 

13. Reduction in securities transaction tax by 20% on cash delivery transactions i.e. from 0.125% to 1%. 

14. Rajiv Gandhi Equity Saving Scheme to allow income tax deduction to retail investors on investing in equity Share. 50% of investment upto ` 50,000 eligible for deduction. 3 years lock-in-period under the scheme. 

15. Presumptive taxation of SMEs to be raised from 60 lakhs to 1 crore. [Sec. 44AD] 

16. Deduction u/s 80C for Life Insurance Premium not in excess of 10% of actual capital sum assured for Policy issued on or after 1.4.2012.

17. Deduction upto 60,000 in respect of Medical Treatment of Specified disease incurred in respect of Senior Citizen (60 years or more age instead of 65 years or more). [Sec. 80DDB] 

Indirect Taxes

1. Proposal to raise service tax rate from 10% to 12%.

2. Proposal to tax all services except those in the negative list. Negative list to include pre- school & high school education, entertainment services (Cinema Industry)

3. Standard rate of excise duty proposed to be raised from 10% to 12%.

4. Excise duty on large cars also proposed to be enhanced from 22% to 24%.

5. Full exemption from basic customs duty for import of equipment for expansion or setting up of fertilizer projects upto March 31, 2015.

Thank you !

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