INCOME TAX SLABS FOR 2013-14 & HIGHLIGHTS
INCOME TAX SLABS 2013-14 & HIGH LIGHTS
In the Union Budget 2012-13, Finance Minister Pranab Mukherjee has given a marginal benefit on the much awaited income tax slabs. The biggest beneficiaries would be people having income between Rs. 800,001 to 999,999 per annum. They move from the 30% slab to the 20% slab.
PERSONAL INCOME TAX SLABS
The basic slab for income tax has been proposed to be raised to Rs. 2 lakhs from the current Rs. 1.8 lakhs. This leads to a savings of Rs. 2,000 for all taxpayers earning between 180,001 to 199,999. The finance Minister has not mentioned the tax slabs for women and senior citizens in his Budget Speech so far but it is awaited.
In addition, the finance minister has created new tax slabs. If your income is between Rs. 200,001 and Rs. 500,000, your tax rate will be 10%. For people earning Rs. 500001 to Rs. 10,00,000 — the tax rate will be 20% and for people whose income is Rs. 10,00,001 and above the tax rate is 30%.
The finance minister has also said that taxation of unexplained money, credits, investments, expenditures etc, will be at the highest rate of 30%, here the slab of income will not be considered.
5000 RUPEES EXEMPTION
The FM has proposed to give a deduction of Rs 5000 for expenses incurred on preventive health check-up. Now you can go fearlessly to that neighborhood hospital and get the executive master health check-up done and get a tax benefit too.
INVEST IN EQUITY AND GET TAX BENEFITS
A new equity scheme called Rajiv Gandhi Equity Saving Scheme is being introduced to promote equity investments. The scheme will get income tax deduction, which will be purely applicable to the new retail investors who will invest directly into equity up to Rs. 50000, with a lock-in period of three years. The investor’s annual income should not exceed Rs. 1,000,000.
In order to ensure more participation from small towns in IPOs, the FM has announced that changes have been made in the IPO guidelines. The exact guidelines have not been mentioned yet. However, this will help the capital markets in the long-run and even your neighbour share broker who can now look at rural India in a big way.
TAX FREE BONDS
The Finance Minister has proposed to allow selected government undertakings to issue tax-free bonds of Rs. 60,000 crore, which is double the amount assigned in the previous year.
SAVE, EARN INTEREST AND AGAIN SAVE
The FM has proposed to give a tax deduction of up to Rs 10,000 on interest earned from savings bank accounts. This means you can keep up to Rs. 2.5 lakhs continuously in your savings bank, get interest (currently 4% in most banks) and not worry about the interest getting taxed.
EASE ON EDUCATION LOAN RATES
The finance minister has said that Credit Guarantee Fund is to be set up which is likely to reduce the risk of banks. For that reason, the banks might reduce the rate of interest on educational loans.
LUXURY PRODUCT LOVERS DISAPPOINTED
The finance Minister has announced 12% excise duty on branded retail garments but it has been proposed that multi-brand shops are to be supported and the country can expect more number of malls and Super Malls in the future.
The price of luxury cars is expected to go up. This will disappoint people who were planning for the prices to fall post budget. The customs duties on the silver and gold prices have gone up to 4% from 2%. This will make both gold and silver costlier than what they are today. However, the branded silver jewellery is fully exempted from excise duty.
The custom duty of LCD and LED panels has been exempted. In addition, the mobile phone parts are exempted from basic customs duty, which is expected to bring down the price of mobile phones.
The Interest subvention of 1 percent has been extended for one more year on housing loans up to Rs. 15 lakhs. The Finance Minister has also announced that a Credit Guarantee Trust Fund is to be set up to ensure better flow of Institutional Credit for Housing Loans.