Budget 2011 Tax Rate for the year 2011-12 (Assessment year 2012-13)
| Rate of Tax |
General |
Woman |
Senior citizen |
Very Senior citizen |
| Nil |
1.80 lakhs |
1.90 lakhs |
2.50 lakhs |
5 lakhs |
| 10% |
1.80 - 5 lakhs |
1.90 - 5 lakhs |
2.50 - 5 lakhs |
Nil |
| 20% |
5 - 8 lakhs |
5 - 8 lakhs |
5 - 8 lakhs |
5 - 8 lakhs |
| 30% |
Above 8 lakhs |
Above 8 lakhs |
Above 8 lakhs |
Above 8 lakhs |
| Saving (Rs.) |
2060 |
Nil |
1030 |
26780 |
Companies
The rates of income-tax in the case of companies are specified in Paragraph E of Part III of the First Schedule to the Bill. These rates are the same as those specified for the assessment year 2011-12.
The existing surcharge of 7.5 % on a domestic company is proposed to be reduced to 5%.
In case of companies other than domestic companies, the existing surcharge of 2.5% is proposed to be reduced to 2%.
Definition of charitable purpose Existing Provision:- Charitable purpose has been defined in section 2(15) which, among others, includes “the advancement of any other object of general public utility. However, “the advancement of any other object of general public utility is not a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity and receipts from such activities is ten lakh rupees or more in the previous year.
Proposed provision: - It is proposed to amend section 2(15) to enhance the current monetary limit in respect of receipts from such activities from INR 10 lakhs to INR 20 Lakhs.
Effective Date: - 1st April, 2012 Infrastructure Debt Fund New Provision :- It is proposed to insert clause (47) to section 10 in order to augment long-term, low cost funds from abroad for the infrastructure sector to facilitate setting up of dedicated debt funds. Section 10 of the Income-tax Act excludes certain incomes from the ambit of total income. It provides for power to the Central Government to notify any infrastructure debt fund which is set up in accordance with the prescribed guidelines. Once notified, the income of such debt fund would be exempt from tax. It will, however, be required to file a return of income.
Any interest received by a non-resident from such notified infrastructure debt fund shall be taxable at the rate of 5% on the gross amount of such interest income. It is further proposed to insert a new section 194LB to provide that tax shall be deducted at the rate of five per cent. by such notified infrastructure debt fund on any interest paid by it to a non-resident.
Effective date :- 1st June 2011. Provisions relating to Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) in case of Special Economic Zones Existing Provisions: - A deduction of hundred per cent. is allowed in respect of profits and gains derived by a unit located in a Special Economic Zone (SEZ) from the export of articles or things or services for the first five consecutive assessment years of 50% for further five assessment years; and thereafter, of 50% of the ploughed back export profit for the next five years under Section 10AA of the Income-tax Act.
A deduction of hundred per cent. is allowed in respect of profits and gains derived by an undertaking from the business of development of an SEZ notified on or after 1st April, 2005 from the total income for any ten consecutive assessment years out of fifteen years beginning from the year in which the SEZ is notified by the Central Governmen [Section 80-IAB of the Income-tax Act,t.
Under the existing provisions of section 115JB(6), an exemption is allowed from payment of minimum alternate tax (MAT) on book profit in respect of the income accrued or arising on or after 1st April, 2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone (SEZ), as the case may be.
Further, under the existing provisions of section 115-O(6), an exemption is allowed from payment of tax on distributed profits [Dividend Distribution Tax (DDT)] in respect of the total income of an undertaking or enterprise engaged in developing or developing and operating or developing, operating and maintaining a Special Economic Zone for any assessment year on any amount declared, distributed or paid by such Developer or enterprise, by way of dividends (whether interim or otherwise) on or after 1st April, 2005 out of its current income. Such distributed income is also exempt from tax under section 10(34) of the Act.
Proposed Provision :- W.e.f 1 April 2011 SEZ developers and units are brought within the ambit of MAT and SEZ developers are now liable to dividend distribution tax of 15% effective from 1 June 2011. Weighted deduction for contribution made for approved scientific research Program
Existing Provision: - Weighted deduction to the extent of 175% is allowed for any sum paid to a National Laboratory or a university or an Indian Institute of Technology (IIT) or a specified person for the purpose of an approved scientific research program under section 35(2AA) of the Income-tax Act.
Proposed Provision: - It is proposed to increase this weighted deduction from 175 per cent. to 200 per cent for the purpose of promoting more contributions to such approved scientific research programs.
Effective Date:- 1st April, 2012 Investment linked deduction Existing provision:- Under the existing provisions of section 35AD of the Income-tax Act, investment-linked tax incentive is provided by way of allowing hundred per cent. deduction in respect of any expenditure of capital nature (other than on land, goodwill and financial instrument) incurred wholly and exclusively, for the purposes of the “specified business. Currently, the following specified businesses are eligible for availing investment-linked deduction under section 35AD(8)(c):-
(i) setting up and operating a cold chain facility;
(ii) setting up and operating a warehousing facility for storage of agricultural produce;
(iii) laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network;
(iv) building and operating, anywhere in India, a new hotel of two-star or above category as classified by the Central Government;
(v) building and operating, anywhere in India, a new hospital with at least one hundred beds for patients;
(vi) developing and building a housing project under a scheme for slum redevelopment or rehabilitation framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed.
Proposed provision:
It is proposed to include two new businesses as “specified business i.e,-
(a) developing and building a housing project under a scheme for affordable housing framed by the Central Government or a State Government, as the case may be, and notified by the Board in this behalf in accordance with the guidelines as may be prescribed; and
(b) production of fertilizer in India.
Effective date: - These amendments will take effect from 1st April, 2012 and will, accordingly, apply in relation to the assessment year 2012-13 and subsequent years. Tax benefits for New Pension System (NPS) Existing Provision: - Section 80CCD of the Income-tax Act provides, inter alia, a deduction in respect of contributions made by an employee as well as an employer to the New Pension System (NPS) account on behalf of the employee. In view of the provisions of section 80CCE, the aggregate deduction under sections 80C, 80CCC and 80CCD cannot exceed one lakh rupees. The allowable deduction under section 80CCD includes both the employees as well the employers contribution to the NPS.
Proposed Provision: -
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