Budget 2012 impact on Individuals

Budget 2012 announced by honourable Finance Minister will have impact on individuals also, be it salaried individual or self-employed.  In this write-up we have tried to summarize various amendments which would have impact on them.

Tax Slab

The Tax Slab has been amended and the basic exemption limit has been extended from Rs. 180000 to Rs. 200000 for all Individuals. No further benefits will be provided to women as the proposed budget has brought the men and women in a general category.  Further, there is no enhancement of basic exemption limit in case senior citizen and very senior citizens.

LIC Deduction u/s 80C

In the budget it is proposed that Deduction of Life Insurance premium of policy taken on own life, life of the spouse or any child which was subject to a maximum of  20% of sum assured has been amended to 10% of sum assured. (Sum assured does not include any premium agreed to be returned or any benefit by way of bonus)].

U/S 80TTA (Interest on Savings account)

A new deduction u/s 80TTA has been introduced for interest on savings account.Under this, deductions is allowed on savings account interest upto 10000 per annum. This deduction will come into effect from 1st April, 2013.

U/S 80D (Preventive Health Check Ups)

Budget also proposed to provide deduction of payment made for “preventive health check up” of self, spouse, dependent children or parents during the previous year u/s 80D.

The proposed deduction on preventive health check up will be available upto Rs.5000 and it is included in overall limit and is not an additional one.

Deduction u/s 80CCF – Removed

Additional deduction of Rs. 20000 for investment in long term infrastructure bond which was available to individuals has been removed. As per the new budget no tax exemption will be provided on investment in Infrastructure bonds.

Deduction u/s 80G (Donations)

Budget also proposes that any donation made which exceeds a sum of ten thousand rupees shall only be allowed as a deduction if such sum is paid by any mode other than cash.

Securities Transaction Tax (STT) reduced from 0.125% to 0.1% 

For every equity transaction, STT is payable. As per the new budget it has now been reduced by 1%..Earlier it was 1.25% , but now it has been reduced to 1%. So it means you will have to pay less for your equity transactions.

TDS @1% in case of selling residential property

If you want to sell your residential flat/house/plot (any kind of real estate) whose selling price is more than Rs.50 lacs then you will have to pay TDS. As per this budget, whenever you sell your residential property and the selling price is more than 50 lacs, you will have to compulsorily pay TDS @1%.

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