Budget 2013: 5 facts about your taxes

The Finance Minister P Chidambaram presented the Union Budget for the financial year 2013-14 and there are several changes that will impact you as an individual. The end result is a reduction in the overall taxes that most of you will pay to the government.

Tax credit for low income individual

There is a benefit provided to those individuals who fall into the lowest income tax slab of Rs 2.2 lakh to Rs 5 lakh, in the form of a rebate of Rs 2,000 in their taxes. This will mean a savings in tax for those who fall into this specific tax bracket. For those between Rs 2 lakh and Rs 2.2 lakh the total tax to be paid would be available as a credit.

Interest limit

There is an additional deduction available on interest repaid on a loan for a first time house purchase. The benefit here has been increased by an additional Rs 1 lakh and this will be over and above the Rs 1.5 lakh limit available, if the house price is less than Rs 40 lakh and the loan is Rs 25 lakh or less. This benefit can be claimed in the next year if not exhausted in the first year.

Higher surcharge

The finance minister has announced that a surcharge of 10 per cent will be present on income above Rs 1 crore. All taxpayers falling within this category, will have a higher amount of tax to be paid. Since the limit is so high, a large population of this country would be exempted. There are 42,000 people who disclosed taxable income of over Rs 1 crore.

Tax free bonds

There will be another year in which tax free bonds will be available as various institutions have been allowed to issue such bonds for one more year. This will mean that the investors can reduce their tax liability by investing in such instruments and the income earned here would not be taxable.

Tax deduction at source
Anyone selling a house property worth Rs 50 lakh or more, will have to ensure a 1% tax deduction at source on the amount of the sale and will have to deposit this with the government. What this could also mean is an increase in the procedure and administrative work at the time of sale of the property.