India’s New Tax Structure for the Year 2012-13

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Income tax rates with respect to the assessment year 2012-2013

Mar. 20 – In respect to income of all categories of assessees accountable for tax during the assessment year 2012-13, the rates of income tax have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance Act (2011) for the purposes of computing “advance tax,” deduction of tax at source from “salaries,” and charging of tax payable in certain cases.

Surcharges on income-tax
Surcharges shall be charged with respect to income accountable to tax for the assessment year 2012-13 in the following cases:

  • In the case of an Indian national having total income exceeding 1 crore rupees, the amount of income tax calculated shall be increased by a surcharge for the purposes of the Union calculated at the rate of 5 percent of such income tax
  • In the case of a company, other than a domestic company, having total income exceeding 1 crore rupees, the amount of income tax computed shall be increased by a surcharge for the purposes of the Union calculated at the rate of 2 percent of such income tax

Though, marginal respite shall be allowed in all cases to ensure that the additional amount of income tax payable, including surcharge, on the excess of income over 1 crore rupees is limited to the amount by which the income is more than 1 crore rupees.

Moreover, in the case of every company having total income taxable under section 115JB of the Income Tax Act (1961) and where such income exceeds 1 crore rupees, surcharge at the rates mentioned above shall be levied and marginal relief shall also be provided.

Education Cess
For assessment year 2012-2013, an additional surcharge called the “Education Cess on Income Tax” and “Secondary and Higher Education Cess on Income Tax” shall continue to be levied at the rate of 2 percent and 1 percent, respectively, on the amount of tax computed, inclusive of surcharge, in all cases. No marginal relief shall be available.

Rates for deduction of income tax at source
The rates for deduction of income-tax at source from “salaries” during the financial year 2012-13 and also for computation of “advance tax” payable during the said year in the case of all categories of assessees have been specified in Part III of the First Schedule to the Bill.

These rates are also applicable for charging income-tax during the financial year 2012-13 on current incomes in cases where accelerated assessments have to be made, for instance, provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during the financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for a short duration.

The salient features of the rates specified in Part III are indicated in the following paragraphs. Paragraph A, Part III of the First Schedule to the Bill provides the following income tax rates:

The rates of income-tax in the case of every individual (other than those mentioned in table 2 or table 3 below), Hindu undivided family, association of persons, body of individuals, whether incorporated or not, or every artificial juridical person referred to in Sub-clause (vii) of Clause 31 of Section 2 of the Income-tax Act (not being a case to which any other Paragraph of Part III applies) are outlined in table 1 below.

No surcharge shall be charged in cases of persons covered under Paragraph A, Part III of the First Schedule.

Cooperative societies
These rates will continue to be the same as those specified for the assessment year 2012-13. No surcharge shall be levied.

Firms
This rate will continue to be the same as that specified for the assessment year 2012-13. No surcharge shall be levied.

Local authorities
This rate will continue to be the same as that specified for the assessment year 2012-13. No surcharge shall be levied.

Companies
These rates are the same as those specified for the assessment year 2012-13.

The existing surcharge of 5 percent in case of a domestic company shall continue to be charged. In case of companies other than domestic companies, the existing surcharge of 2 percent shall continue to be levied.

On the other hand, the total amounts payable as income tax and surcharge on total income exceeding 1 crore rupees shall not exceed the total amount payable as income tax on a total income of 1 crore rupees by more than the amount of income that exceeds 1 crore rupees.

The existing surcharge of 5 percent in all other cases (including sections 115JB, 115-O, 115R) shall continue to be levied.

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23 thoughts on “India’s New Tax Structure for the Year 2012-13

    Col MMP Kala, retd says:

    Thanks. It is an educative paper written in simple language so that one and all can understand. An elucidation of various sub sections, especially the exemptions would nave made the paper more comprehensive. Col Kala

    Nitin says:

    Nice!!

    Thanks Nitin! – Chris

    RAJESH MISHRA says:

    Sir please tel me Director remuneration and salary will be service taxable.

    K M Jose says:

    Dear Sir,

    Is surcharge payable by a company having income of less than one crore on Dividend distribution tax and if so under which section / provision of the Income Tax Act ?

    Thanks.

    Dear Rajesh,

    Director Remuneration other than Salary is Liable for Service Tax.

    Dear Mr. Jose,

    Yes the surcharge @ 5% needs to be paid u/s 115 O . Surcharge is not levied acoording to any section of the Income Tax Act. It is the additional charge on taxes imposed for the purpose of Union by the Finance Minister under theConstitution of India in Annual Budget Everyyear.

    Please refer the 2012-13 Finance Budget for clarification
    http://indiabudget.nic.in/ub2012-13/mem/mem1.pdf

    Feel Free to Contact in case you have further query.

    Best Regards,
    Cherry Bansal

    Amjad khan says:

    Dear sir,, i am not seen what is the rate of income tax on salary. Please reply

    Dear Amjad,

    For Salary, please refer the slabs given above for individuals.

    Feel free to contact me on cherry.bansal@dezshira.in for any further clarification.

    Thanks,
    Cherry Bansal

    jayakumar d.k says:

    pse. help me to prepare indiual in come tax for the year 2012-13 salaried my monthly salary about 32420 p.m. how to prepare assesment and how much can save tazx house.rent 6150 cca350 uniform 100 medical 100 spl.30 pp 75 and ded.pf10,000 pt200 gis120 and recovery for welfare 20.00 pm can u help me if possible send prepared chart pse.

    Dear Jayakumar D.K.

    Yes surely , we can help you in structuring the salary in the tax efficient way. I will be contacting you through email. Please provide me your email address or mail me at cherry.bansal@dezshira.in.

    Best Regards,
    Cherry Bansal

    Rupesh says:

    Hi,

    Thanks for the detailed info. I have a little confusion regarding this tax deductions. My total CTC is 5L pa where as 4.5L is my package. 50K I will be getting at the end of the year. So tax will be completely on 5L r8? I pay only 5000 medical insurance and 6500rs per month as rent. What is the maximum limit for house rent expenditure? Will the medical expenses I show have a maximum limit of medical reimbursement provided by my company? I am paying insurance for my father and mother who are not tax payers and are dependents on me, will the insurance I pay for them can be claimed under dependents? Finally, how much amount I should be investing to avoid tax deduction?

    This will be of immense help if you can guide me.

    Regards,
    Rupesh

    aHMAD KHAN says:

    Dear sir,, i am not seen what is the rate of income tax on salary. Please reply

    Surinder Bharaj says:

    Dear Sir,

    I have a dual citizenship and have rental and interest income in India to the tune of some Rs 700,000/-. During this Financial Year, I had to remain in India for some 200 days. Here in USA I am getting social security of $ 753/- and there is a deduction of Medicare medical insurance of $99/-. That means I am getting a net credit of $654/- Per month. May I know if the amount of my social security will be added to my income in India and if so roughly how much income tax I will have to pay. Here in USA I file joint tax return with my wife, which is is less than $1000/- PM. Is there any legal way to save some money.

    With regards
    Surinder

    suresh.s says:

    which taxes applicable for an press

    indra pal gulati says:

    sir i want to know that pensioners below 60 years are also liable for education cess on incometax.

    CA Manoj kumar says:

    As per my knowledge this tax was to be levied at the rate of 2% of income tax inclusive of the existing surcharge. Cess is applicable to all the taxes deducted at source, taxes collected at source. There is now such type of exemption for senior citizen.

    Sushil Gupta says:

    My income including Pension & Intt received from bank for the Fy 2012-13 is Rs.476511/. I have deposited Rs.one Lac for Tax Saving FD in Bank. I am 69.. Pl.let me know how much Income Tax I have to pay… Thanks…

    Jagdish Gupta says:

    My Annual Income including Pension & Intt rceived frrm bank for the FY 2012-13 is Rs. 568079/- I have deposited Rs. one lac in PPF..Pl.let me know my Tax Liability.
    Thanks.

    Jas walia says:

    Sir I have started a business and have a rough estimate of 40cr annually do i have the same tax rate i.e 30%

    Gunjan Sinha says:

    The applicable tax rate will depend upon the fact that whether your company is registered in India or a Foreign company, the applicable tax rates for Domestic companies is @30% plus a surcharge of 5% in case the INCOME exceeds 1 Crore. Further the applicable tax rate is chargeable to a cess for 3% on rate of tax applicable. Hence the effective tax rate turns out to be 33.99%, in case Surcharge is applicable and 30.9% in case the same is not applicable. For companies other than Domestic companies the rate is 40%. The rates mentioned are for FY 2012-13. For FY 2013 – 14 the Rate of Income Tax remain the same but the surcharge shall be 5% in case the income exceeds 1 crore and 10% in case the same exceeds 10 crores.

    Yasar Raza says:

    Sir,
    My father is a businessman, he lives in qatar but rest of the family lives here(INDIA), we have a building at which 7 shops & 6 rooms are there , these shops & rooms are given on rent, rent for a shop is Rs 1000 which becomes Rs 7000 for all shops while the rent for the room is Rs 1500 which becomes Rs 9000 for all the rooms, so the total rent for a month is Rs 16000 which means Rs 192000/year.
    and this income comes under the income from house property.
    The other thing is me & my younger brother living on rent for doing studies away from home town and we are giving the rent of Rs 4000/ month.
    i want to know on what percentage i should give the tax for above & is there any way to reduce the tax.

    Gunjan Sinha says:

    Dear Yasar Raza,

    The Total Income earned from House property turns out to be Rs 192,000.

    At the first place, since the income has been earned by an individual the applicable taxes shall be in accordance with the Slab rates notified above.

    Income shall be computed in the following manner :

    Annual value of Rent received – 192,000
    Less : Amount of Rent not realised – NIL
    Less: Municipal taxes paid NIL
    Less : Standard Deduction 57,600

    Gross Total Income from House Property 134,400

    Less: Interest payable on House Property NIL

    Total Income from House Property 134,400

    Assumptions :
    1. Property is situated in India.
    2. Income shall be taxed in the name of person in whose name the property is registered.

    Thanks
    Gunjan Sinha

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