Highlights of Direct Tax Budget 2012-13

  • Tax proposals for 2012-13 mark progress in the direction of movement towards DTC and GST.
  • DTC rates proposed to be introduced for personal income tax.
  • Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs 1,80,000 to Rs 2,00,000 giving tax relief of Rs 2,000.
  • Upper limit of 20 per cent tax slab proposed to be raised from Rs 8 lakh to Rs 10 lakh.
  • Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts.
  • Proposal to allow deduction of upto Rs 5,000 for preventive health check up.
  • Senior citizens not having income from business proposed to be exempted from payment of advance tax.
  • To provide low cost funds to stressed infrastructure sectors, rate of withholding tax on interest payment on ECBs proposed to be reduced from 20 per cent to 5 per cent for 3 years for certain sectors.
  • Restriction on Venture Capital Funds to invest only in 9 specified sectors proposed to be removed.
  • Proposal to continue to allow repatriation of dividends from foreign subsidiaries of Indian companies at a lower tax rate of 15 per cent upto 31.3.2013.
  • Investment link deduction of capital expenditure for certain businesses proposed to be provided at the enhanced rate of 150 per cent.
  • New sectors to be added for the purposes of investment linked deduction.
  • Proposal to extend weighted deduction of 200 per cent for R&D expenditure in an inhouse facility for a further period of 5 years beyond March 31, 2012.
  • Proposal to provide weighted deduction of 150 per cent on expenditure incurred for agri-extension services.
  • Proposal to extend the sunset date for setting up power sector undertakings by one year for claiming 100 per cent deduction of profits for 10 years.
  • Turnover limit for compulsory tax audit of account and presumptive taxation of SMEs to be raised from Rs 60 lakhs to Rs 1 crore.
  • 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.
  • Proposal to provide weighted deduction at 150 per cent of expenditure incurred on skill development in manufacturing sector.
  • Reduction in securities transaction tax by 20 per cent on cash delivery transactions.
  • Proposal to extend the levy of Alternate Minimum Tax to all persons, other than companies, claiming profit linked deductions.
  • Proposal to introduce General Anti Avoidance Rule to counter aggressive tax avoidance scheme.
  • Measures proposed to deter the generation and use of unaccounted money.
  • A net revenue loss of Rs 4,500 crore estimated as a result of Direct Tax proposals.


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