Recently the budget 2012 was out and a number of changes had been made regarding taxes and financial policies. We were expecting that the slab for exemption from income taxes would be raised to at least 3 lakhs but it has not happened. Similarly, a number of other changes had been made that can affect your savings. If you are tax payer in India, this post will help you to understand the impact of budget 2012-13 on your life.
Change in Tax Slabs in 2012-13 Budget
Earlier the minimum taxable income was 1.8 lakhs which has been raised to 2 lakhs in this budget. Thus if your annual income is less than 3 lakhs, you need not pay any taxes to the government. The new tax slabs are as follows:
0-2 lakhs - Nil
2-5 lakhs - 10%
5-10 lakhs - 20%
Above 10 lakhs – 30%
An interesting thing in this budget is that the taxable limit for both men and women has been kept same (2 lakhs ) for the first time in the history of India. The taxable limit for senior citizens (above 60 years) has been kept as 2.5 lakhs and for senior citizen above 80 yrs it is 5 lakhs. A good news for all the tax payers in India is that, most of them will save about Rs 2000 on taxes per year.
Increase in service tax from 10 % to 12 %
This is one of the changes that will have big impact on our lives. Since the service taxes have been increase, you will have to pay more for telephone bills, restaurant bills, and insurance premiums. In brief, any service on which service tax is imposed by Indian government will get costly for the customers. You can expect an increase of about Rs 500-2000 in your monthly bills depending on your lifestyle.
Exemptions on Interest from Saving Bank account
Earlier the interest obtained from your saving bank accounts was taxable. But as per the changes in budget 2012-13, if the annual interest for money deposited in savings bank accounts in less than 10000, you need not pay any taxes on it. This also allows to post office saving accounts. Since the interest rate in saving accounts is between 3-5 %, it requires a deposit of about 2 lakhs in saving bank accounts for interest of Rs 10000. In my opinion, this change will not be helpful for most of the people as we keep most of the savings in fixed deposits. An important thing to remember here is that the interest obtained from the fixed deposits is still taxable.
Decrease in EPF (Provided Fund) from 9.5 % to 8.25%
A bad news for the salaried people is that the interest rates on EPF had been decreases from 9.5 % to 8.25 %. This step taken by government is really hard to understand as the interest rates on EPF were increased in the previous year only.
Rajiv Gandhi Equity Saving Schemes
A new scheme named ““Rajiv Gandhi Equity Saving Scheme” has been launched by Indian finance minister in this budget. It allows an investor to claim 50% of his investments in direct equity. This scheme is available for only new investors and your yearly income should not be more that 10 lakhs to avail the benefits of this scheme. Again, there would be a three year lock in period in this scheme and thus you will not be able to sell the stocks before three years.
Preventive Health Checkup Deduction
A new deduction has been introduced in the section 80 D. This feature named “preventive health checkup” allows you to claim the checkup cost of up to Rs 5000. This is in addition to the claim of Rs 15000 allowed for medical insurance premiums.
So these were the budget 2012-13 India highlights that will affect our lives. If you have any doubts regarding the changes in this budget, you can post a comment below.