Extracts from Budget Speech as delivered by Honorable Finanace Minister Shri. Pranab Mukherjee on Direct Taxes

Madam Speaker,

            I now come to Part B of my proposals.

135.     The life of a Finance Minister is not easy. Various players, including policy makers, politicians, agriculturists and business houses, participate in the making of the economy. When everything goes well with the economy, we all share in the joy. However, when things go wrong, it is the Finance Minister who is called upon to administer the medicine. Economic policy, as in medical treatment, often requires us to do something, which, in the short run, may be painful, but is good for us in the long run. As Hamlet, the Prince of Denmark, had said in Shakespeare’s immortal words, “I must be cruel only to be kind.”

            With this reminder, let me now turn to the tax proposals.

136.     Last year, I had set the compass for movement towards the DTC in Direct Taxes and GST in Indirect Taxes. My tax proposals for fiscal year 2012-13 mark further progress in that direction.

Key Features of Budget 2012-2013 - Direct Taxes

Key Features of Budget 2012-2013 - Specifically on Direct Taxes.

■                    Tax proposals for 2012-13 mark progress in the direction of movement towards DTC and GST.

■                    DTC rates proposed to be introduced for personal income tax.

■                    Exemption limit for the general category of individual taxpayers proposed to be enhanced from Rs.1,80,000 to Rs.2,00,000 giving tax relief of Rs.2,000.

■                    Upper limit of 20 per cent tax slab proposed to be raised from Rs.8 lakh to Rs.10 lakh.

■                    Proposal to allow individual tax payers, a deduction of upto Rs.10,000 for interest from savings bank accounts.

CWT Vs. Smt. Neena Jain 2011 P&H High Court

As per Sec. 2(ea), "assets" mean, inter alia, any building, whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within 25 kms from local limits of any municipality or a cantonment board. The Definition of "assets" under Sec. 2(ea) also includes urban land.
The High Court opined that the words "any building" could not be read in isolation and had to be harmoniously construed with the remaining portion of Sec.2(ea) i.e., whether the building was used for residential or commercial purposes or for the purpose of maintaining a guest house, because an incomplete building could not be possibly either be used for residential or commercial purposes or for the purposes of maintaining a guest house. Therefore, the word "building" has to be interpreted to mean a completely built structure having a roof, dwelling place, walls, doors, windows, electric and sanitary fittings, etc.
Consequently, the incomplete building is not an asset chargeable to wealth tax.