New Income-Tax Slab

Tax Slab         % Change
Up to Rs2 lakh        Nil
Rs2– Rs5 lakh 10%
Rs 5–Rs10 lakh 20%
Above Rs 10 lakh 30%

Rajiv Gandhi Equity Saving Scheme

In a bid to boost retail investors' participation in the capital markets, the government has introduced a tax exemption scheme for equity markets targeted at new investors in the Union Budget 2012-13. A scheme christened as Rajiv Gandhi Equity Saving Scheme is expected to deepen bourses investors base and reduce volatility.

Under the proposed scheme, a 50% deduction on short-term capital gains tax will be allowed for new investors in the equity market up to an annual investment limit of Rs500,000. Currently, short-term capital gains tax is levied at 15% on all listed securities and units of equity-oriented funds. This means, investors will end up paying Rs 7.5% tax.

Only those taxpayers with an income of up to Rs10 lakh per annum will be eligible for it.

Tax deductions under 80C

• Life Insurance Premium
• Unit Linked Insurance Plans (ULIP)
• Equity Linked Savings Schemes (ELSS)
• Public Provident Fund (PPF)
• Provident Fund (Contribution by the Employee)
• NSC - National Savings Certificate
• Fixed Deposit for 5 years
• Home Loan Repayment (Principal)
• Stamp Duty and Registration Charges
• Tuition Fee Payment
• Post Office Time Deposit Account
• Infrastructure Bonds
• Senior Citizen's Savings Scheme