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The most interesting part of the Budget-2012 is going to be the Limit for Individual Taxation and there is a hope for individual Taxpayers to get a very good response in this respect from the Finance Minister Mr. Pranab Mukharjee. This aspect of the Budget has a very wide and large mass appeal. So I have taken it as the first part of my regular write ups on Budget-2012.

The current rate of Tax on Individual Taxation is:-

Income Slab (Rs. in Lakhs)

Rate of Tax (%)

Up to Rs. 1.80 Lakhs

Nil

Rs. 1.80 to Rs. 5 Lakhs

10

Rs. 5.00 to Rs. 8 Lakhs

20

Over Rs. 8 Lakhs

30

For Woman assessee the initial limit is Rs. 1.90 Lakhs, senior citizens (age of 60 years or more) the initial Limit is Rs. 2.50 Lakhs and for very much citizen the initial limit Rs. 5.00 Lakhs.

The Rates of Tax on Individual Taxation as mentioned in DTC is as under:-

Income Slab (Rs. in Lakhs)

Rate of Tax (%)

Up to Rs. 2.00 Lakhs

Nil

Rs. 2.00  to Rs. 5 Lakhs

10

Rs. 5.00 to Rs. 10 Lakhs

20

Over Rs. 10  Lakhs

30

As per Today’s News report the parliamentary panel  on DTC under the chairmanship of Mr. Yashwant Sinha has the unanimous opinion that the Basic Limit should be raised Rs. 3 Lakhs and the Investment Limit for deduction from the Gross Total Income  should be raised to Rs. 2.50 Lakhs from the existing Limit of Rs. 1.20 Lakhs( Rs. 1 .00 Lakh for LIC, PF, NSC, children’s tuition fees etc and Rs. 20000.00 in Infrastructure Bonds) . Though the report of the panel will be presented in third week of the March but what is highlighted the press may have an impact on Budget-2012 itself.

The enhancement of Limit up to Rs. 3.00 Lakhs will have its revenue impacts also and there are difference of opinion in experts in this anticipated move of raising the limit by 67% from the existing Limit.   

CA AMARJIT CHOPRA, the Past president of Institute of chartered Accountants of India, in an exclusive tele-talk with CA SUDHIR HALAKHANDI welcomed the anticipated move and opined that for better compliance of law the tax limit should be raised and it will show the results in coming years.

On the other hand CA SUNIL TALATI , the another past president of ICAI is of the opinion that raising the limit up to Rs. 3.00 Lakhs is quite high and it should be restricted to Rs. 2.00 Lakhs as mentioned in DTC because the Government needs money for development of the country.

Now the exact Limit should be anywhere between these Limits and it will be very interesting to see how much relief is in the “mysterious bag” of FM in this respect for the Individual assessee.

By

CA SUDHIR HALAKHANDI

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