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UNION BUDGET 2012-2013 -- TAX Proposals


Both men and women have now been brought under General category with income upto Rs 2,00,000 exempt from taxes.

Upper limit of 20% tax slab proposed to be raised from Rs. 8 lakh to Rs. 10 lakh.

For income upto Rs 2 lakh, the tax deduction will now be nill. For those with an income between Rs 2-5 lakh the tax deduction would be 10%. For income between Rs 5-10 lakh the tax bracket will be 20%. Income above Rs 10 lakh will now come under the 30% tax bracket.

Proposal to allow deduction of upto Rs 5,000 for preventive health check up.

Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts. Kindly note that it is for saving bank accounts and not from FDRs.

Senior citizens not having income from business proposed to be exempted from payment of advance tax.

Proposal to continue to allow repatriation of dividends from foreign subsidiaries of Indian companies at a lower tax rate of 15% upto 31.3.2013

Exemption from Capital Gains tax on sale of residential property, if sale consideration is used for subscription in equity of a manufacturing SME for purchase of new plant and machinery.

Reduction in securities transaction tax (STT) by 20% on cash delivery transactions.


Proposal to tax all services except those in the negative list comprising of 17 heads.

Proposal to raise service tax rate from 10% to 12%.