Income Tax from 01 Apr 12

Income Tax Applicable From 01/Apr/2012 : New Tax rates: (For Ordinary source of income) Slab Income Between Tax rate 1 0 - 1.60 Lakhs 0% 2 1.60 Lakhs to 10 Lakhs 10% 3 10 Lakhs to 25 Lakhs 20% 4 Above 25 Lakhs 30% For Female, second slab begins from 1.90 Lakhs and for Senior citizen it begins from 2.40 Lakhs Companies tax rate changed from 30% to 25%. New due dates for Tax Returns: Sl No Type Date First filing (under DTC) 1 Non-Business / Non-Corporate 30th June 30/06/2012 2 Others 31st August 31/08/2012  Tax incentives: Earlier terms Deductions under Chapter VI A will be treated as Tax incentives. 80C gets a major hit by introduction of EET methodology (Exempt - Exempt - Tax). The investment is Exempted when invested. The investment is Exempted till it is remained invested. The investment is Taxed when it is withdrawn. Also, investments are considered only of those invested through savings intermediaries approved by PFRDA (Pension Fund Regulatory and Development Authority)!! Such savings intermediaries may in turn invest in ELSS mutual funds, government securities, Public sector securities, etc. Such investments are also exempted to the maximum of Rs. 3 Lakhs. All such savings will be governed directly by government by an appointed depository (an independent agency). Other than this, Tuition fees for children will be allowed as deductions. No maximum limit for this, as savings are charged once they are withdrawn. Medical treatment, higher education loan interest, donation and rent paid by self-employed individual are deductible. New provision comes for Handicapped individuals to get deductions upto 75,000. Major Deductions applicable under Tax Incentives for an individual: Investments through PFRDA approved agencies (Max of 3 Lakhs) Payment of tuition fees Medical treatment Health insurance Donations Interest on loan taken for higher education Maintenance of a disabled dependant Interest income on Govt bonds *Some more for specific cases, like political contributions, royalty, etc Deductions from Salaries: Allowed are only, PT, Transport Allowance (limit prescribed) and special allowances given exclusively to meet duties (to the extent actually incurred). Also deduction is allowed for PF as tax incentives. And last, deductions are allowed for Voluntary retirement, Gratuity on retirement and pension received. No deductions on HRA, Medical reimbursements, etc, etc. Employer part of PF paid will be exempt from tax as Tax Incentives under EET methodology (to employees).  House Property: No deduction for Housing loan repayment of Self-Occupying property. This includes interest as well as part of principal. Only Let out properties are considered and the Gross rent and specified deductions are taken with simple calculations. Residuary Sources (Other Sources) Earlier things follow almost. Any amount exceeding 20,000 taken / accepted / repaid as loan or deposit, otherwise by an account payee cheque/draft shall be added to the income.  Computation of total Income Incomes are broadly divided into 2 sources, namely Special Sources and Ordinary Sources. Special sources are given no deduction and what is earned is taxed directly (generally at a lower rate). Ordinary sources are divided into further categories, namely: Income from employment. Income from House Property Income from Business Capital gains Income from Residuary Sources (Similar to other sources, with some minuses Twitter Delicious Digg Facebook Stumbleupon RSS About the Author I`m SENTHAMARAIKANNAN Author Of Senthamaraikannanclub and i interested in Blogs and socialnetworking I wrote so many blogs in my name since 2007.Follow me On Twitter, Like us On Facebook, Join us on Google +