Income tax rates: Budget 2013 Impact

Lower income group (up to Rs 5 lakh)

Tax payer having income up to Rs 5 lakh to get Rs 2000 as rebate. The benefit available under the Rajiv Gandhi Equity Savings Scheme (RGESS) has been extended to three consecutive years. Further investment in listed units of mutual fund would also qualify as eligible investment for RGESS.

Middle income group (between Rs 5 lakh to Rs 12 Lakh)

No change in the tax rates for the middle income group tax payers. Those earning up to Rs 12 lakh would also benefit for investment into RGESS as eligibility income group limit has been raised from Rs 10 lakh to Rs 12 lakh.

Those tax payers who do not own any house can claim additional deduction of Rs 1 lakh towards housing loan interest. However this is subject to the conditions that the cost of house should not exceed Rs 40 lakh and loan taken does not exceed Rs 25 lakh.

High income group (between Rs 12 lakh to Rs 1 crore)

No change in the tax rates. However the individual can avail the additional deduction in relation to housing loan as explained above.

Very High income group (More than Rs 1 crore)

Tax payers earning more than Rs 1 crore to pay surcharge of 10 per cent of their tax liability..

Other key changes

Life insurance premium are eligible for deduction under section 80C where such premium does not exceed 10 per cent of sum assured. The cap has been raised to 15 per cent where the insurance is taken for an individual who is suffering from disability or specified ailments. Similar changes have also been in relation to exemption of maturity benefit in relation to such polices.

Security transaction tax (STT) has been removed on the purchase of equity oriented mutual funds through the stock exchange. Further the sale of such funds either on the stock exchange or directly to the mutual fund group will also attract STT at lower rate of 0.001 per cent.

Commodities Transaction Tax (CTT) at 0.01 per cent has been introduced on the sale transactions. Such CTT shall be eligible for deduction while computing the taxable profits of the business.

Electronic filing of annexure-less wealth tax return introduced.

Buyer of a property (other than agricultural land) required to withhold 1 per cent where the sale consideration exceeds Rs 50 lakh or more.

Return filed without payment of taxes would be considered as defective return.

The power of the tax officers has been expanded to direct audit where it is considered necessary and is in the interest of the revenue keeping in view the factors such as volume of accounts,doubts about the correctness,multiplicity of transactions etc.