Finance Minister Pranab Mukherjee presented Union Budget 2012 on 16th March-2012, the 81st Budget in India’s history. Individually, this is Mukherjee’s seventh annual Budget, second-highest by any Finance Minister.
Below are the key highlights of Union Budget 2012. Budget will be applicable from 1st April, 2012.
1. Direct Taxes:
A) Income Tax Rates/ Income Tax Slab -2012
1. Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000.
2. Upper limit of 20% tax slab proposed to be raised from Rs 8 lakh to Rs 10 lakh.
3. Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts.
4. Senior citizens not having income from business proposed to be exempted from payment of advance tax.
5. The tax rates and slabs have been modified. The proposed rates and slabs are as follows:
Annual Income Tax Slab
Up-to Rs 200,000 (for senior citizens 250,000) Nil
Between Rs 200,000 to 500,000 10%
Between Rs 500,000 to 1,000,000 20%
Above Rs 1,000,000 30%
No enhanced limit for women. Men and women are treated same now .
B) New Investment upto Rs 50,000 in equity.
Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50% to new retail investors (whose annual income is below Rs 10 lakh), who invest upto Rs 50,000 directly in equities. The scheme will have a lock-in period of 3 years
Other highlights of Income Tax (Direct Tax)
2. Indirect Taxes:
1. Standard rate of excise duty to be raised from 10% to 12%, merit rate from 5% to 6% and the lower merit rate from 1% to 2% with few exemptions.
2. Excise duty on large cars also proposed to be enhanced.
3. Service tax rate raised from 10% to 12%