Yesterday, Finance Minister Pranab Mukherjee announced few rollbacks
from the budget proposals in his opening speech to discuss the Finance Bill
2012 in Lok Sabha.
The rollbacks affecting individuals and investments are given below. To help understand the rollback better, initial
budget proposal is listed first, followed by the rollback proposed yesterday.
Budget Proposal: W.e.f October 2012, sale of residential property
for transaction value more than Rs. 50 lakhs in specified urban agglomeration
or Rs. 20 lakhs in any other area shall attract tax deduction at source of 1%
of the transaction value irrespectively whether the transfer is profitable or
not.
Revised Proposal: The above proposal has been withdrawn and there
shall not be tax deduction at source on sale of residential property.
Budget Proposal: Cash purchase of bullion and jewellery for amount
more than Rs. 2 lakhs shall lead to tax collection of 1% of the value by the
seller.
Revised Proposal: The threshold limit of Rs. 2 lakhs has been
increased to Rs. 5 lakhs in case of cash purchase of jewellery. The threshold
limit for cash purchase of bullion has been retained at Rs. 2 lakhs. However, it is clarified that bullion will
not include any coin or other article weighing 10 gms or less.
Budget Proposal: Imposition
of central excise duty on unbranded precious metal jewellery at the rate of 1%.
Revised Proposal: The levy of central excise duty on all precious
metal jewellery, branded and unbranded, has been withdrawn.
Additional Proposal: Sale
of unlisted securities in an initial public offer, which were hitherto charged to
capital gain tax, shall be exempted from long term capital gains tax. Instead of long term capital gains tax, securities
transaction tax @ 0.2% shall be levied on such sales. However, short term capital gains tax on such
sale is still applicable at marginal tax rate.
