Feedback on amendments in the Income Tax provisions under the Union Budget, 2012
By : CA V.S. Nahar (Ex-Chairman, Udaipur Branch of The Institute of Chartered Accountants of India and Vice Chairman Elect for Udaipur Tax Bar Association)
1. Basic ceiling of income tax has been raised to Rs 2,00,000 . This has resulted in a tax saving of Rs. 2,060 per annum for assesses having an annual income within the bracket of Rs. 2-8 lakhs. For the assesses having annual income at Rs 9,00,000, there is a saving of Rs 12,360. For assesses having an annual income at Rs. 10,00,000 or above there is a saving of Rs 22,660.
2. The above changes sees a meager benefit to assesses who have an annual salary of Rs. 8,00,000 whereas a Rs. 1 lac increase in annual salary results in a six-fold saving. The moment another 1 lac is added to the income, the annual saving shoots up by 11 times. Hence a high difference in savings as income increases marginally.
3. The distinction between male and female with regard to tax slabs has been abolished.
4. Senior citizens have been exempted from compliance to Advance Tax provisions, thereby giving huge relief to them.
5. Interest on saving bank accounts up to Rs 10,000 has been exempted which has resulted in great relief to small tax payers.
6. There has been no change in the Income Tax rates for corporate assesses.
7. Provisions of deduction of Tax at Source on the sale of immovable properties with certain limits are being made applicable.
8. Re-opening of assessments of the assess having overseas assets has been made possible up to 15 years.
9. The limit of turnover under Section 44AD has been increased to Rs. One crore from the existing ceiling of Rs. Sixty Lakhs. This will result in benefits to a small business assessee who will not now be required to maintain books of accounts if their turnover is less than Rs one crore provided they pay income tax on the income of 8% of their turnover.
10. In the budget, the Direct taxes code which was likely to be made applicable from April 2012 has not been made effective.
For the common man the budget is not up to their expectation as far as income tax provisions are concerned.