Whether TDS is applicable on repurchase/sale of mutual fund units??

Tax Deducted at source is applicable only for NRI mutual fund Investors. In case of Resident Indians, TDS is not deducted on the sale proceeds of mutual fund.
 

TDS for NRI 

In case of NRI's, TDS will be deducted on the sale proceeds
The TDS will get deducted depending upon whether it is a short-term capital gain or long term capital gains.

 

@ after providing for indexation
## Subject to NRI’s having Permanent Account Number in India
*STT @ 0.25% will be deducted on equity funds at the time of redemption and switch to the other schemes.
Mutual Fund would also pay securities transaction tax wherever applicable on the securities bought/sold.
^Assuming the investor falls into the highest tax bracket
# The total income of the corporate would exceed Rs. 1 Crore
** The tax rates are subject to DTAA benefits available to NRI’s
*** These are the tax rates applicable to capital gains, in case the rate of tax is lower than 20% and if the NRI does not have a Permanent
Account Number, then for the purpose of TDS, the withholding tax rate would be 20%.

Investment in Gold ETF comes under Section 80C Tax rebates?

Investment is Gold ETF fund or Gold Savings fund (fund of fund)does not qualify for tax benefit under section 80C of Income tax Act.

Now  question arise which mutual fund schemes gets tax benefit(deduction under section 80C)??

Deduction under 80C is available in following mutual fund schemes:

1. ELSS Funds  
Equity Linked Savings Schemes will qualify for tax benefit under  Section 80C of Income Tax Act. More so  when you invest in ELSS Scheme, amount is locked in for 3 Full years, even when you do SIP in ELSS Fund each SIP and (dividend which is reinvested, if you opted for dividend reinvestment option)  is also locked  in  for 3 years.

How Lock in Period works in ELSS fund is explained in this link

Explain Lock in Period if investment is in ELSS Funds Through SIP (Systematic Investment Plan)

2. Pension Plans of mutual funds

 Earlier Pension Plans schemes of mutual fund qualified for a tax rebate under section 88 of the Income Tax Act 1961. From 1st April 2005, in terms of Section 80C(7) of the Act, a pension fund referred to u/s 88 shall be eligible for deduction u/s 80C of the Income Tax Act, 1961. All Subscription in Pension Plan is locked in for 3 years.

So when you invest in ELSS funds or Pension funds of mutual funds, you qualify for deduction under section 80C.

Now your second question: how gold ETF funds are taxed??

The tax system for gold ETFs is similar to that of non-equity mutual funds like debt funds. When computing income tax, gold exchange traded funds are treated as debt funds. 

   

Long Term Capital Gains (Hold for more than a year)

Arising from the sale of  Gold ETF or Gold Savings Fund (fund of fund)

 

10% on the capital gain without the benefit of indexation.

20% on the capital gain after including the impact of indexation.

Whichever is lower, on the profits made?

So, 11.33 per cent without indexation or 22.66 per cent with indexation which ever is lower

(The investor is also liable to pay the applicable surcharge, if any and other cess on the tax.)

Short Term Capital Gains (Hold for less than a year)

 Arising from the sale of Gold ETF or Gold Savings Fund (fund of fund)

The short-term capital gain on debt schemes is clubbed with the income (added to your annual income) of the investor and is taxed at the slab rate.

The investor is also liable to pay the applicable surcharge, if any and other cess on the tax.

 

AMFI Circular on Uniform Procedure for Change of Bank details, Change of Address

Uniform Procedure for Change of Bank details, Change of Address

AMFI Best Practice Guidelines Circular No.26/2011-12

1. Background:

1.1 The report of NISM Committee constituted by SEBI on Operational Risk Issues related to Investor Service process in Mutual funds was forwarded to all members vide our e-mail dated July 28, 2010. It was stated in the said e-mail that AMFI was working on the implementation plan on various recommendations made by the Committee. 

Also check:

What is the procedure for change/update of Multiple Bank details in mutual funds in India??

1.2 Some of the recommendations such as risk mitigation against third party cheques, registration of multiple bank mandates etc. have already been implemented by the Mutual Funds.

1.3 The NISM committee in the aforesaid report has also highlighted the risk associated with change of address and change of bank details submitted with or without redemption. 

Also check:

Process for change of address in mutual funds after KYC Compliant??

 How to change email address in mutual funds in India

KYC Update - IF Process done prior to 1st Jan 2012

1.4 AMFI circular 135/BP/17/10-11 dated October 22, 2010, has recommended all AMCs to provide the facility of Registration of Multiple Bank Accounts for pay-in and pay-out to the investors. The same circular also mandates the supporting documents towards updation of new bank mandate as part of Multiple Bank Accounts Registration Form.

1.5 Further, vide clause 3.3.3.2 of AMFI circular 135/BP/17/10-11 dated October 22, 2010 AMCs were advised to segregate the forms containing redemption request and change of bank account request to ensure that two different requests are handled and executed separately for all existing and new customers.

1.6 NISM committee report also recommended in section 3.2, Recommendation 2 (d) as “Redemption proceeds are only credited to registered bank accounts. In case a redemption request is received before the change of bank details has been validated and registered, the redemption request would be processed to the currently registered (old) bank account. (This is akin to how banks would treat such a request).”

1.7 It is observed that these practices have not been implemented in letter and spirit by all the AMCs. In recent times, Mutual Fund industry has witnessed increasingly fraudulent attempts by external elements by changing the address and / or bank details of the genuine investor.

1.8 In order to protect the interests of the investors and mitigate the risks, based on the recommendations made by the NISM committee as well as AMFI circular 135/BP/17/10-11 dated October 22, 2010, uniform procedure for carrying out change of bank or registering multiple banks is re-emphasized by way of this circular.

1.9 Additionally, in case of request for change of address by the investors, a uniform procedure, in line with NISM committee report recommendation under section 3.10 and modified with current applicable KYC norms, has now been devised as mentioned below.
2. Change of Bank details: Document Requirements, Forms and Processes


2.1 Updation of bank accounts in a customer’s account/folio should be either through Multiple Bank Account Registration Form or a standalone separate Change of Bank Mandate form.

2.2 In case of standalone change of bank details, Mutual Funds shall collect the supporting documents towards the proof of new bank details as per Annexure I-A. Based on AMCs internal risk assessment, they may also consider collecting proof of old bank account and proof of identity of the clients, while effecting a change of bank account.

2.3 AMCs are advised to segregate the forms for redemption request and change of bank account request to ensure that the two different requests are handled and executed separately for all existing and new customers, as per clause 3.3.3.2 of AMFI circular 135/BP/17/10-11 dated October 22, 2010 by the implementation date of this circular.

2.3.1 In other words, forms like common transaction forms, or any other form containing redemption request should not have the facility to change the bank mandate or update a new bank mandate.

2.3.2 AMCs should also advise distributors to segregate forms for redemption and change of bank account where the distributors use their own transaction slips and have combined redemption and change of bank mandate request.

2.3.3 Customers should be encouraged to register multiple bank accounts and choose any of the registered bank accounts towards receipt of redemption proceeds.

2.3.4 Any unregistered bank account or a new bank account forming part of redemption request should not be entertained or processed.

2.4 In case of folios/accounts where the bank details were not provided by the investor at the time of making investment (pertains to the period when bank details were not mandatory), AMCs shall collect the documents such as proof of new bank details and photo identity proof. The list of suggested documents is as per Annexure I-B.

2.5 Where in a folio held on behalf of minor, when the minor attains the age of majority, Mutual Funds shall collect the documents relating to his/her bank mandate registration as specified in AMFI circular 135/BP/20/10-11 dated February 09, 2011.

3 Change of Address: Document requirements and processes


3.1 KYC Not Complied Folios/Clients: In case of change of address for KYC Not Complied Folios, Mutual Funds shall collect the following supporting documents:

3.1.1 Proof of new Address (POA), and

3.1.2 Proof of Identity (POI): Only PAN card copy if PAN is updated in the folio, or PAN/other proof of identity if PAN is not updated in the folio.

3.1.3 Based on AMCs internal risk assessment, they may also consider collecting proof of old address, while effecting a change of address.

3.2 KYC Complied Folios/Clients: In case of change of address for KYC complied Folios, Mutual Fund Intermediaries shall collect the following supporting documents:

3.2.1 Proof of new Address (POA),

3.2.2 Any other document/form that the KRA may specify form time to time.



3.3 Existing clients who are currently KYC not complied as per SEBI circular no. MIRSD/SE/Cir–21/2011 dated October 5, 2011 should be encouraged to comply with the same so as to enable the clients to seamlessly invest/trade in future.

3.4 List of admissible documents for Proof of new Address (POA) and Proof of Identity (POI) as mentioned in points 3.1 and 3.2 above should be in conformity with SEBI circular no. MIRSD/SE/Cir–21/2011 dated October 5, 2011.



3.4.1 Copies of all the documents submitted by the applicants/clients should be self-attested and accompanied by originals for verification.

3.4.2 In case the original of any document is not produced for verification, then the copies should be properly attested / verified by entities authorized for attesting/verification of the documents as per extant KYC guidelines.


4 Cooling period:

4.1 AMCs should follow the concept of cooling period as enumerated in AMFI circular number 135/BP/17/10-11 dated October 22, 2010, whenever any change of bank mandate request is received / processed few days prior to submission of a redemption request or on the same day as a standalone change request.

4.2 The entire activity of verification of cooling period cases and release of redemption payment shall be carried out within the period of 10 working days from the date of redemption. This is in accordance with sub clause (c) of Regulation 53 of the Securities and Exchange Board of India (Mutual Fund) regulations, 1996 and SEBI circular no. SEBI/MFD/CIR/2/266/2000 dated 19th May 2000.



5 Intimation to investors

5.1 The mode of communication to the investor regarding any changes or rejection of their requests may be by more than one mode like letters, emails and SMS.

5.2 On receipt of change of address or change of bank account requests and after carrying out any changes in their records, Mutual Funds or their respective Registrars & Transfer Agents (RTA) should follow the verification process of sending intimation letter to both old and new addresses; as well as intimation via email and/or sms to the clients.

5.3 In case of rejection of change of address request due to any reason like signature difference etc, the rejection intimation letter should be sent to both old and new the address mentioned, as well as via email and/or sms to the clients.

5.4 Similar procedure of intimation to clients shall also be followed for address updation in case of KYC Complied Folios.

5.5 In case of change of email ID or mobile number, the change intimation should be sent to both old and new email IDs and/or mobile numbers.

5.6 In case if the investor is not able to produce any of the supporting documents, Mutual Funds shall devise an alternate procedure to establish genuineness of the request before executing the request or making payment to the investor.

5.7 All the processes included in clauses 2 to 4 above should be made a part of SID / SAI.

6 Implementation timelines:

AMCs are directed to:

6.1 Incorporate the guidelines in scheme related documents,

6.2 Put in place systems and processes with R&TAs to implement the above mentioned facilities and processes at the earliest but not later than May 01, 2012. 
  6.3 Bring the contents of this circular to the information of distributors and investors for their understanding and benefit. 

DOCUMENTS FOR PROOF OF NEW BANK ACCOUNT AND NEW ADDRESS(Annexure I-A)

1] New bank account:
Original of any one of the following documents or originals should be produced for verification or copy should be attested by the Bank:

• Cancelled original cheque of the new bank mandate with first unit holder name and bank account number printed on the face of the cheque
• Self attested copy of bank statement  
•   Bank passbook with current entries not older than 3 months Bank Letter duly signed by branch manager/authorized personnel

AND

2] Self attested copy of any one of the documents prescribed as list of documents admissible as Proof of Identity (PoI) under Para B of Instructions / Check List annexued to SEBI circular Ref No MIRSD / SE / Cir – 21 / 2011 dated October 5, 2011 on uniform KYC, provided the document is valid at the time of submission.

AND

3] Proof of investment (Optional, based on AMC’s risk assessment) such as copy of acknowledgement of investment, debit entry in pass book, counterfoil of the dividend warrant or SoA (issue date more than 2 years old)*/ Membership Advice/ certificate from where the investment has been converted / merged to the present scheme, if applicable. *Account statement issued on current date shall not be treated as investment proof.

 

DOCUMENTS FOR PROOF OF NEW BANK ACCOUNT AND NEW ADDRESS(Annexure I-B)  

Updation of bank details wherein bank details were not recorded with us/ Registrar / not available in SoA (Legacy folios)

 
1] New bank account:

Original of any one of the following documents or originals should be produced for verification or copy should be attested by the Bank: 

•  Cancelled original cheque of the new bank mandate with first unit holder name and bank account number printed on the face of the cheque.
• Self attested copy of bank statement
• Bank passbook with current entries not older than 3 months.
• Bank Letter duly signed by branch manager/authorized personnel

2] Self attested copy of any one of the documents prescribed as list of documents admissible as Proof of Identity (PoI) under Para B of Instructions / Check List annexued to SEBI circular Ref No MIRSD / SE / Cir – 21 / 2011 dated October 5, 2011 on uniform KYC, provided the document is valid at the time of submission.


3] Proof of investment (Optional, based on AMC’s risk assessment) such as copy of acknowledgement of investment, debit entry in pass book, counterfoil of the dividend warrant or SoA (issue date more than 2 years old)*/ Membership Advice/ certificate from where the investment has been converted / merged to the present scheme, if applicable. *Account statement issued on current date shall not be treated as investment proof.

Forms 

  Multiple Bank account Registration form cams

         

   Multiple Bank account Registration form karvy

Form for HDFC Mutual Fund

Form for Franklin Templeton Investments

 Form for Reliance Mutual fund

 Form for SBI Mutual Fund

Source: amfi india

National Saving Certificate - Tax treatment on Maturity Amount!

The National Savings Certificate popularly referred to by its acronym NSC is a post-office savings scheme. NSC is a good medium term investment option.

National Saving Certificate - Tax treatment on Maturity Amount!

The contributions you make to NSC qualify for section 80C deduction up to Rs. 1 lakh. Subsequently, even the interest that accrues every year and gets reinvested qualifies for 80C deduction and also note that Interest received on maturity (last year) will not eligible for rebate u/s 80 C. However, on maturity, the interest income is taxable as per respective slab of individual.

At the end of NSC maturity period there will not be any tax liability on the Principal amount invested. Interest earned from NSC is taxable. Interest on NSC is taxable under the head 'Income from other sources'.

  

Interest accrued every year is liable to tax (you can include that every year on accrual basis to your income as income from other sources). However, interest is also deemed to be reinvested and thus eligible for section 80C deduction. It is conceded by the Board Circular No. 405 dated January 15, 1985 (1985) 151 ITR (St.) 48, that the interest accretion for each year (as indicated in the certificate) can be treated as reinvestment in the same NSC, so that interest which has to be offered for tax can be claimed as deduction under Sec. 80C, subject to the overall ceiling of Rs.1 lakh under Sec. 80C along with other savings. Presumably the new ten-year NSC will also qualify for deduction under Sec. 80C, if notified, with the same treatment for interest.

Now two situations we discuss here:

1. When you declare the interest from NSC on yearly basis
2.  When you don’t declare the interest from NSC on yearly basis, but consider entire amount at the time of maturity

When you declare the interest from NSC on yearly basis

It is advisable and even allowed that we can declare the interest from NSC on yearly basis even though interest is deemed to be reinvested and more so considered as fresh purchase and we get benefit under section 80C (deduction from 80C), So, over the period of six years, you could declare the interest income for each year, thus it does not amount to a huge sum at the time of maturity.

When you don’t declare the interest from NSC on yearly basis

If you do not declare the interest on an accrual basis, then the entire interest earned would accumulate in the year of maturity. You could then claim it under Section 80C, but it would be a huge amount and would be taxable at the current applicable tax rate.

Interest income is taxable at the respective slab rate of the individual.

How to find Interest rate of NSC check this calculator….

NSC interest rate calculator

Also refer this
http://the-analytical-mind.blogspot.in/2013/01/how-to-file-nsc-interest-for-income-tax.html

Dividend in Equity and Hybrid mutual funds in India (March 22 2012 to March 30 2012)

 

Dividend in Equity and Hybrid mutual funds

(March 22 2012 to March 30 2012)

Also check

1. Forthcoming Dividends in Equity mutual funds in India (March 21 2012 to March 23 2012)

2.  Forthcoming Dividends in Equity and Hybrid Funds (March 09 2012 to March 16 2012)

3. Forthcoming Dividends in Equity Funds (March 06 2012 to March 09 2012)

Dividend in Reliance Tax Saver (record date March 29, 2012)

Declaration of dividend in various Equity schemes of Reliance Mutual Fund

• Reliance Tax Saver (ELSS) Fund – Dividend Plan
• Reliance Regular Savings Fund – Balanced Option – Dividend Plan
• Reliance Equity Opportunities Fund – Retail Plan – Dividend Plan
• Reliance Equity Opportunities Fund – Institutional Plan – Dividend Plan

Dividend in Kotak Balanced Fund (record date March 26, 2012)

Dividend in Kotak Balanced Fund (record date March 26, 2012)

Dividend in Franklin India Flexi Cap fund (record date March 23, 2012)

Franklin Templeton Investments (India)has announced a tax-free dividend of Rs 2.00 per unit (face value of Rs10), in its Franklin India Flexi Cap Fund. All investors registered in the dividend plan as on March 23, 2012 will receive this tax-free dividend. (Pursuant to payment of dividend, the NAV of the fund would fall to the extent of payout.

The record date for the dividend is March 23, 2012 and any purchases on or before this date will be eligible for the dividend. Under the dividend reinvestment plan, the dividend declared will be reinvested in the fund at the NAV of March 25, 2012 and unit holders will be allotted additional units for the dividend amount.

Dividend History in Franklin India Flexi Cap Fund

Also Refer:

on line registration for franklin india flexicap fund

Dividend in Tata Equity Opportunities Fund (record date March 23, 2012)

Pursuant to payment of the dividend, the NAV of the scheme would fall to the extent of the payout and statutory levy (if applicable). All investors in the dividend option of the fund as on the closure of business hours on the record date will be eligible for dividend. Dividend distribution is subject to availability and adequacy of distributable surplus.

Board of Trustees reserves the right to restrict the quantum of dividend upto the per unit distributable surplus available on the record date in case of fall in the market.

ISIN Numbers of Gold Funds in India

 

Scheme Name	ISIN Number	Lunch Date
Axis Gold Fund Dividend Payout	INF846K01AM1	30-Sep-11
Axis Gold Fund Dividend Reinvestment	INF846K01AN9	30-Sep-11
Axis Gold Fund Dividend Growth	INF846K01AL3	30-Sep-11
HDFC Gold Fund Growth	INF179K01LC5	7-Oct-11
Kotak Gold Fund Dividend Payout	INF174K01AU1	4-Mar-11
Kotak Gold Fund Dividend Reinvest	INF174K01AV9	4-Mar-11
Kotak Gold Fund Growth	INF174K01AT3	4-Mar-11
Reliance Gold Savings Fund Dividend Payout	INF204K01KO8	14-Feb-11
Reliance Gold Savings Fund Dividend Reinvest	INF204K01KP5	14-Feb-11
Reliance Gold Savings Growth	INF204K01KN0	14-Feb-11
SBI Gold Fund Dividend Payout	INF200K01HB9	22-Aug-11
SBI Gold Fund Dividend Reinvest	INF200K01HC7	22-Aug-11
SBI Gold Fund Growth	INF200K01HA1	22-Aug-11

To check the ISIN Number of any mutual fund scheme
Visit here:AMFI India
or Check NDSL link
Also check

Does Investment in Gold ETF comes under Section 80C Tax rebates?

Dividend in SBI Magnum Tax Gain Scheme (Record date March 22, 2012)

SBI Mutual Fund has announced a dividend of 35% (i.e. Rs 3.5 per unit on the face value of Rs 10) in SBI Magnum Tax gain Scheme. The record date for dividend is March 22, 2012. NAV as on 19th March,2012 – Rs. 35.00/-

When will you receive dividend

After record date, if you opted for direct credit then in such case will get credited within 7-8 working days in your bank account registered in that scheme, and in case of cheque payment it will take 10-15 working days.
This information (details) are available in account statement as which mode of payment is alloted to you.

Even i have investment in SBI Magnum tax Gain and have option of direct credit to my bank account. The SBI Magnum tax Gain dividend got credited in my bank account on March 28, 2012.

Update for 2013
 Dividend in SBI Magnum Tax Gain Scheme (Record date March 28, 2013)
http://mutual-funds-personalfin.blogspot.in/2013/03/dividend-in-sbi-magnum-tax-gain-scheme_26.html

Dividend in Birla Sun Life Tax Relief 96 (record date March 23, 2012)

Birla Sun Life Mutual fund announced dividend under the dividend option of Birla Sun Life Tax Relief 96. The quantum of dividend will be Rs. 1.50 per unit.

The record date of dividend is March 23, 2012

Earlier, it declared a dividend of Rs.4 per unit in March 31, 2011.

The Nav of fund as on march 19, 2012 is  70.070

When will you receive dividend

After record date, if you opted for direct credit then in such case will get credited within 7-8 working days in your bank account registered in that scheme, and in case of cheque payment it will take 10-15 working days.
This information (details) are available in account statement as which mode of payment is alloted to you.

I have investment in BSL Tax Relief 96 and have option of direct credit to my bank account. The BSL Tax Relief 96 dividend got credited in my bank account on March 28, 2012.

Dividend in DSP BlackRock Natural resource and new Energy Fund And in DSP BlackRock Small and mid cap (record date March 23, 2012)

Dividend in DSP BlackRock Natural resource and New Energy Fund,

 DSP BlackRock Small and mid cap 

(record date March 23, 2012)

Dividend in Reliance Vision, Growth and Regular Savings Equity option (record date March 23, 2012)

Dividend in Reliance Vision, 

Reliance Growth and

 Regular Savings Equity option

(record date March 23, 2012)

Service Tax Exemption for All Mutual Fund Distributors wef July 1, 2012

The recent Budget Notification on Service Tax 12/2012 states the following:

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]


Government of India Ministry of Finance Department of Revenue
Notification No.12/2012-Service Tax

New Delhi, the 17th March 2012

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66 B of the said Finance Act, namely:-

29. Services by the following persons in respective capacities -
(a) a sub-broker or an authorised person to a stock broker;

(b) an authorised person to a member of a commodity exchange;

(c) a mutual fund agent or distributor to mutual fund or asset management company for distribution or marketing of mutual fund;

(d) a selling or marketing agent of lottery tickets to a distributer or a selling agent;

(e) a selling agent or a distributer of SIM cards or recharge coupon vouchers; or
(f) a business facilitator or a business correspondent to a banking company or an insurance company in a rural area

 Source: Service Notification 2.2012
Source:  www.cbec.gov.in/ub1213/st02-2012.pdf
 http://www.ifagalaxy.com/



Update: June 11, 2012

No service tax on MF distributors from July 1

Mutual fund agents and their sub-agents will not have to pay service tax from July 1, 2012 for distributing or marketing mutual funds.

Also check

  
MF distribution costs out of service tax ambit

MF agents laugh more on the way to the bank

Forthcoming Dividends in Equity mutual funds in India (March 21 2012 to March 23 2012)

Also refer:

Dividends in Equity and Hybrid mutual funds in India (March 22 2012 to March 30 2012)

Dividend Update (Date from March 1, 2012 to March 7, 2012)

Forthcoming Dividends in Equity Funds (March 06 2012 to March 09 2012)

 Forthcoming Dividends in Equity and Hybrid Funds (March 09 2012 to March 16 2012)

 

Dividend in HDFC Equity Fund and HDFC Long Term Advantage fund, (record date March 23, 2012)

 Dividend in HDFC Equity Fund and HDFC Long Term Advantage

(record date March 23, 2012)

Highlights: Union Budget 2012-13

Union Finance Minister Pranab Mukherjee on 16 March 2012, tabled the union budget in the parliament for the financial year 2012-13.

As per the Union Budget 2012-13, the growth in FY 2011-12 has slowed due to the global crisis with the Indian economy expected to grow at 6.9% with agricultural sector growing at 5.4% and services sector growing at 9.6% in financial year 2011-12 and the GDP growth expected during FY 2012-13 at 7.85%. The fiscal deficit is 5.1% of the GDP for the fiscal year 2013.

1. Fiscal deficit pegged at 5.1% for FY 13 from a revised 5.9% for FY 12. Original deficit for FY had been pegged at 4.6%. This represents a total slippage of INR 109,000 crores for FY12 over initial estimates. Fiscal deficit for FY 13 at INR 513,600 crs versus revised FY 12 of INR 521,980 crores

2. An unprecedented 93% of the fiscal deficit is to be borrowed via dated government bonds vs a still large 83.5% in FY12. This translates into a gross market borrowing of INR 569,000 crores (INR 510,000 crores in FY 12) and a net borrowing of INR 479,000 crores (INR 436,000 crores in FY 12)

The key highlights of the Union Budget 2012-13 as tabled in the Lok Sabha are as follows:

• The personal income tax exemption limit will be raised to Rs 200,000 (Rs 2 lakh) from the existing Rs 180,000.

• Senior citizens will have to pay no advance tax.

• Individual will have to pay 10 per cent tax on income between Rs. 2 lakh and Rs. 5 lakh; 20 per cent between Rs. 5 lakh and Rs. 10 lakh; and 30 per cent for above Rs. 10 lakh.

• Health insurance deduction up to Rs 5000 for preventive health checkup.

• There has been no change in corporate tax.

• Reduction in STT rate by 20% from 0.125% to 0.1%

• Interest on savings account exempt up to Rs. 10,000

• The homeowners of apartments can enjoy tax exemption of Rs. 5000/. Spent on maintenance. 

• This exemption level has been increased from Rs.3000/- to Rs. 5000/-.

• The Capital Gains Tax will not be applicable for people who use the amount generated from the sale of their houses as an equity investment in small and medium businesses.

• Introduction of the “Rajiv Gandhi Equity Saving Scheme”  wherein small investors’ get annual tax exemptions on equity investments up to 50000 Rs with three years lock in. This new equity savings scheme to provide for income tax deduction of 50% for those who invest Rs.50, 000 in equity and whose annual income is less than Rs. 10 lakhs

• Introduction of GST in August 2012 is proposed. Direct tax code (DTC) to be introduced in FY14.

• Government has raised both standard excise and service tax rates from existing 10% to 12%.

• New revised income tax return form ‘Sugam’ to be introduced for small tax payers

• Infrastructure investment in 12th Plan to go up to Rs. 50 lakh crore; half of it to come from private sector

• Tax free infra bonds to be raised to Rs. 60,000 crore

• Excise duty proposed to be hiked to 12 percent

• Bills on micro-finance institutions, national land bank and public debt management among those to be introduced in 2012-13

• Turnover limit for compulsory tax audit for SMEs raised from Rs. 60 lakh to Rs. 1 crore

• Time limit for reopening of assessment raised to 16 years

• A central "Know Your Customer" depository to be developed in 2012-13 to avoid multiplicity of registration and data upkeep.

• Gold will become costlier as customs duty on standard gold increased up to 4% from the current 2%, non- standard gold to 10% from 5%.