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You are here: Features Finance Union Budget 2012: Income Tax amendments and its implications - Personal Tax

Union Budget 2012: Income Tax amendments and its implications - Personal Tax

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Union Budget 2012: Income Tax amendments and its implications
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4. Additional deduction u/s 80CCB for investment in infrastructure bonds upto INR 20,000/- has been extended beyond a.y.12-13. – A GOOD MOVE, AN ADDITIONAL AVENUE FOR TAX SAVING INVESTMENT FOR SMALL TAX PAYERS CONTINUES FURTHER.

5. Senior citizens not having business income not required to pay advance tax - A GOOD MOVE, RESULTING IN LESSER COMPLIANCE FOR SENIOR CITIZENS, BUT WOULD BURDEN THEM WITH THE ENTIRE TAX LIABILITY TO BE PAID AT ONE GO AT THE TIME OF FILING RETURNS.

6. Deduction of upto INR 10,000/- for interest earned in SB account - A GOOD MOVE, WOULD REDUCE TAX BURDEN OF SMALL TAX PAYERS WHO KEEP THEIR SAVINGS IN NORMAL BANK SAVING BANK ACCOUNTS.

7. Salaried employees having salary income upto INR 5 Lakhs and interest income from SB account upto INR 10,000/- would not be required to file tax returns - A GOOD MOVE, RESULTING IN LESSER COMPLIANCE BY SALARIED EMPLOYEES DRAWING LOW SALARY, BEING SMALL TAX PAYERS.

8. Tax deduction for payment of life insurance premia and tax exemption for maturity proceeds received shall no longer be available for new policies taken where the annual premium exceeds 10% of the sum assured. – THIS WOULD DISCOURAGE INVESTMENT IN LIFE INSURANCE SCHEMES. EARLIER LIMIT WAS FOR POLICIES HAVING ANNUAL PREMIUM OVER 20% OF THE SUM ASSURED. FORTUNATELY, THE SAME HAS NOT BEEN MADE APPLICABLE TO EXISTING POLICIES.

9. Capital gain on sale of residential property to be exempt from tax if it is invested in equity shares of eligible companies - A GOOD MOVE, ANOTHER CAPITAL GAIN TAX SAVING AVENUE AVAILABLE TO THE ASSESSEES.

10. Buyer of immovable property worth INR 50 lakhs and above in urban areas and INR 20 lakhs and above in rural areas will now be required to deduct tax at source @1% on payments made to the seller -  THIS WOULD RESULT IN UNNECESSARY COMPLIANCE FOR THE BUYER OF PROPERTIES WHO WILL NOW BE REQUIRED TO OBTAIN THE PAN OF THE SELLER AND THEN DEPOSIT THIS TAX. THE DEPOSIT OF TDS REQUIRES A PERSON TO OBTAIN A TAX DEDUCTION ACCOUNT NUMBER (TAN) AND THEN CONTINUE TO FILE THE TDS RETURNS (EVEN IF IT IS NIL) TILL HE HOLDS THE TAN. HOW THIS PROBLEM IS TO BE SOLVED, HAS NOT BEEN EXPLANIED.

11. Cash purchase of jewellery and bullion over Rs. 2 lakhs would require tax to be collected at source @ 1% by the seller from the buyer - GOOD MOVE TO CURB CASH TRANSACTIONS, BUT WOULD IMPACT JEWELLERY BUSINESS. ALSO UNNECESSARY COMPLIANCE FOR THE JEWELLERY SHOP OWNERS TO OBTAIN PAN OF THE BUYER. THE DEPOSIT OF TCS REQUIRES A PERSON TO OBTAIN A TAX COLLECTION ACCOUNT NUMBER (TAN) AND THEN CONTINUE TO FILE THE TCS RETURNS (EVEN IF IT IS NIL) TILL HE HOLDS THE TAN. HOW THIS PROBLEM IS TO BE SOLVED, HAS NOT BEEN EXPLANIED.

12. STT on delivery transactions reduced by 20% from 0.125% to 0.10% - A GOOD MOVE SINCE IT WILL REDUCE THE COST BURDEN OF IRREGULAR INVESTORS WHO WERE NOT ABLE TO CLAIM THE DEDUCTION FOR THE STT PAID.

CA Sanjay Thampy
ACA, Grad. CWA, CS, DBM
For Kerala IT News

About the Author: Sanjay is a CA based in Mumbai and can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it



Comments (1)
1 Monday, 19 March 2012 18:36
Thank you, the information you shared is very informative

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