The Budget presented yesterday by Finance Minister P Chidambram came as a big disappointment to the tax payers who expected some relaxations in the Income Tax Slabs.

There has been No change in the Slabs and thus No Relief has been provided to the Medium Class Taxpayers. Only a very Small relief of Rs. 2000 has been given to the small taxpayers falling in the total income bracket of Rs. 2 to 5 lakhs.

To increase the government funding, Super Rich Tax on High Income Bracket assesses by way of levying 10 % Surcharge on Income Tax for the persons having income more than Rs. 1 Crore. Enhanced Surcharge of 10 % in place of 5 % has been provided on dividend distribution tax & Companies having Total Income exceeding Rs. 10 Cr.

Real Estate Sector is going to hit adversely by the proposal of bringing 1 % TDS (Tax Deducted at Source) on Transactions (Sale/ purchase) exceeding Rs. 50 Lakhs. The transactions related to agricultural land has been kept outside the purview of TDS Provisions. The difference between DLC Value and Sale Consideration is going to be Taxed in the hands of Buyer also which is going to create hardship in the cases of transfer of Immovable Property.

The Eligibility for Rajiv Gandhi Equity Scheme has been extended from Rs. 10 Lakhs to Rs. 12 Lakhs which entitles an assessee for a deduction up to Rs. 25000 on an investment of Rs. 50000.

The applicability of GAAR (General Anti Avoidance Rule) has been postponed for the time being.

The Rebate for Interest on Housing Loan for First Houses costing less than Rs. 40 Lakhs on which Loan of less than Rs. 25 Lakhs has been taken was enhanced upto Rs. 2.5 Lakhs instead of existing limit of Rs. 1.5 Lakhs.

CA V S Nahar is the Ex-Chairman of Udaipur Branch of CIRC of ICAI & President Elect of Udaipur Tax Bar Association.