Awareness about Income Tax in F.Y.

One of the most basic queries that I always get is: What are the applicable IT slab rates for the current year? Well, knowing the IT brackets and the income tax rates for each is one of the most important steps in calculating your income tax liability. So, let’s find out what these are for this year. Income tax (IT) slabs / brackets for Financial Year 2012-13, Assessment Year 2013-14

Income Rate Men and Women Less than 2,00,000 2,00,001 to 5,00,000 5,00,001 to 10,00,000 10,00,001 and above Senior Less than 2,50,000 2,50,001 to 5,00,000 5,00,001 to 10,00,000 10,00,001 and above Very Senior Less than 5,00,000 NA 5,00,001 to 10,00,000 10,00,001 and above Citizens (Age 60-80 years) Citizens (Age above 80 years)

0% 10% 20% 30%

Notes: An education cess of 3% is applicable on income tax payable for every income tax assessee. Income tax (IT) slabs / brackets for Financial Year 2011-12, Assessment Year 2012-13

Income Rate Men Less than 1,80,000 1,80,001 5,00,001 8,00,001 and above Women Less than 1,90,000 1,90,001 5,00,001 8,00,001 and above Senior Less than 2,50,000 2,50,001 5,00,001 8,00,001 and above Very Senior Less than 5,00,000 NA 5,00,001 to 8,00,000 8,00,001 and above Citizens (Age 60-80 years) Citizens (Age above 80 years)

0% 10% 20% 30%

to 5,00,000 to 5,00,000 to 5,00,000 to 8,00,000 to 8,00,000 to 8,00,000

indicate the amount here.000 per year. etc. 80 C: This is where the bulk of your investments would go. There is no upper limit on the amount that you can claim here.000) e. (Maximum Rs. l. 80 G G C: This is for claiming deductions for donations made to political parties. 40. k. 80 G G: This is for claiming deduction for rent paid by you. (Maximum Rs. 3.000 in income tax. and counted towards Section 80C limit) c. (Maximum 10% of your salary) d. 1 Lakh) b. 80 E: If you are paying interest on an educational loan for yourself or your spouse / children. So if you in the 30% tax bracket. 80 U: This is the deduction available in case of permanent physical disability. g.Deductions: This is where you put the investments you have made to save tax! a. you can save an additional Rs. 80 C C D: If you are a government employee employed after 1st January 2004.000. Please remember that this is applicable only for the interest earned from your savings account – interest from fixed deposits (FDs) is still taxable.000. i. 80 D D: If you have incurred expenses for the medical treatment of any handicapped dependent. 10. PPF. (Maximum Rs. 10. 80 D D B: If you have spent on medical treatment for yourself or your dependents for diseases specified in this section. 80 C C C: Include any amount that you have invested in a pension fund. . It includes investments like PF. 15. you can claim that amount here. Deduction of Interest from Savings Account Interest earned from a bank saving account has been made deductible up to Rs. please claim them here. the interest can be claimed here. indicate the amount paid by you for your pension fund. (Maximum Rs. 2000 per month) j. indicate those amounts here. 80 D: If you have paid any medical insurance premiums. The deduction allowed is a lump sum of Rs. h. f. ELSS. 80 G G A: This is for claiming deductions for donations made for scientific research or rural development. 80 G: If you have made any qualifying donations.

Please remember that this is over and above the tax-free reimbursement of medical bills up to Rs. and would produce a lot of “agents” that would deposit the TDS on your behalf for a fee. you would not need to pay any advance tax.000 per year. So far.000 per year incurred on preventive health checkup would be deductible from your income. What is you are selling the property. 50 Lakhs in urban areas and Rs. 20 Lakhs in rural areas This is not applicable on sale of agricultural land Registration of the property would not be possible unless the buyer provides proof that he / she has deducted the TDS and paid it to the government This comes into effect from 1st October. which is a step in the right direction. If you are buying a property from someone. Another problem is from the seller’s point of view. 5. the government is passing on some of its work to you! This is going to add a lot of frustration to the property buying process. 2012 This is applicable only for secondary market sales – it is not applicable to a house / flat purchased directly from a builder (more clarity is expected on this) This provision is a big googly from this budget. you would get tax benefit even for health check up. 15. No Advance Tax for Senior Citizens If you are a Senior Citizens and do not have any income from business. why should it be your business to collect tax from the seller? Basically. and want to invest in another property or in Section 54EC bonds to save the long term capital gains tax? The buyer .Deduction for Preventive Health Checkup An expense of up to Rs. This would be included within the limit of deduction of health insurance premiums. but it would add a LOT of hassle for common people. you have to deduct TDS (for the profit made by the seller) and deposit it with the government The TDS would be 1% of the sale value This is applicable if the sale value is more than Rs. Tax Deducted at Source (TDS) for Property Transactions This is a brand new provision from this budget: · · · · · · · If you are buyer of a property. you could get tax benefit for the premiums paid for health insurance. Now. It has been supposedly introduced to reduce generation of black money from real estate transactions.

you can claim a deduction of Rs. 10. 35. 10 Lakhs per year · If you invest Rs. Thus.000 from the earlier Rs. This means that various financial institutions can issue double the bonds as compared to last year. 25.000 per year. and you would end up claiming it as a refund when you file yourincome tax return (ITR)! We all know how difficult and time consuming it is to get a refund… Tax Free Infrastructure Bonds The upper limit of tax-free infrastructure bonds has been doubled to from Rs.000). . 50.000 in equities · This tax benefit is available only if your income is less than Rs. if you are in the 20% tax bracket. Also. 25.000 (50% of Rs.000 from the earlier Rs.000. which means you can earn more tax-free income! Overseas Assets Income tax returns and their assessment can now be reopened for up to 16 years if you have assets outside India. 30. 5. service tax would now be applicable on everything except for a very few things (like government services. it is Rs. you need to get your act together! Rajiv Gandhi Equity Savings Scheme (RGESS) To encourage small and new investors to participation in the stock markets. agricultural services. This duty free allowance has been increased to Rs.000. Here are its features: · You would get a 50% deduction for an investment of up to Rs. 60. 50. 25. etc). So everything would cost a little more going forward – from small things like your light bill to big purchases like a car.would still need to deduct the TDS. If you have any holdings overseas.000. a new tax benefit has been introduced through a new scheme called “Rajiv Gandhi Equity Savings Scheme”.000 Crores to Rs. for children. you can save tax up to Rs. Duty Free Allowance People coming into India can bring items of certain value into India without paying any customs duty.000 Crores. · The investment has to be made directly in equities – it cannot be in Mutual Funds (MFs) (more clarity is expected on this soon) · There is a lock-in period of 3 years for these investments · The RGESS is available only to first time investors (more clarity is expected on this soon) Increase in Excise Duty and Service Tax Rates The rates for excise duty and service tax have been increased to 12% from the earlier 10%. This is called the duty free allowance. educational services. 15.

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