TAX PROPOSALS : HOW THEY WILL AFFECT YOU

Zeebiz Bureau

New Delhi: Higher tax exemption limit for individuals, significant benefits for senior citizens, retention of service tax at 10% and withdrawal of some duty exemptions were some of the major tax-related highlights of the Budget 2011-12 presented by Finance Minister Pranab Mukherjee Monday.

Direct tax

1)Individuals:

• Up to Rs 1,80,000 nil
• Rs 1,80,001 to Rs 5,00,000 10%
• Rs 5,00,001 to Rs 8,00,000 20%
• Rs 8,00,000 and above 30%

2) For Women:

• Up to Rs 1,90,000 nil
• Rs 1,90,001 to Rs 5,00,000 10%
• Rs 5,00,001 to Rs 8,00,000 20%
• Rs 8,00,000 and above 30%

3) For Senior Citizens of 60 years But less than 80 years:

• Up to Rs 2,50,000 nil
• Rs 2,50,001 to Rs 5,00,000 10%
• Rs 5,00,001 to Rs 8,00,000 20%
• Rs 8,00,000 and above 30%

4) Very Senior Citizens of 80 Years and above:

• Up to Rs 5,00,000 nil
• Rs 5,00,001 to Rs 8,00,000 20%
• Rs 8,00,000 and above 30%

Direct tax for companies:

• Surcharge for companies cut to 5%, from 7.5%
• New revised income tax return form `Sugam` to be introduced for small tax payers
• Minimum alternate tax raised from 18% to 18.5% of book profits
• Service tax retained at 10%; duty exemptions to be withdrawn on various items
• Net loss from direct tax proposals estimated at Rs 11,500 crore for the year

Indirect taxes:

• Standard rate of central exercise duty maintained at 10%; no change in CENVAT rates
• Nominal 1% central excise duty on 130 items entering the tax net. Basic food and fuel and precious stones, gold and silver jewellery will be exempted.
• Peak rate of customs duty maintained at 10% in view of the global economic situation
• Basic customs duty on agricultural machinery reduced to 4.5% from 5%.
• Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests
• Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be 10% flat
• Excise and customs duty proposals to result in the net gain of Rs 7,300 crore