Budget 2013-14 –Personal Tax, Corporate Tax, Indirect Taxes & Miscellaneous - Highlights

Personal Tax

• No changes in personal Income Tax slabs
• Surcharge on super rich
• Surcharge of 10% for income of Rs 1 cr or more per annum for one year
• Surcharge to be applicable for individuals and corporate
• 1% TDS for property sale worth more than Rs 50 lakh; agri land exempt
• 5.5% tax to GDP ratio for direct tax
• 4.5% tax to GDP ratio for indirect tax
• Tax administration reform commission to be set up to strengthen the system
• Our tax to GDP ratio is very low
• Should reclaim 11.9% Tax-GDP ratio in short-term
• There are 42,800 persons in the country who admitted to a taxable income exceeding Rs 1 cr per year
• Tax credits of Rs 2000 to every person who has total income upto Rs 5 lakh
• Donations to National Children’s Fund will be eligible for 100% tax deduction
• Long-term infra bonds also eligible for tax deduction; additional Rs 1 lakh deduction for home loans
• TDS on value of immovable property as transaction on immovable properties are usually undervalued
• Extends tax cuts benefits to Rupee Infrastructure Funds
• Educational Cess to continue at 3 %
• Securitization Trust income to be exempt
• Tax credit of Rs 2000 on incomes between Rs2-5 lakh
• Tax on Royalty for services provided abroad increased by 10%

Corporate Tax 

• CTT on non-commodities futures at 0.1%
• Surcharge on DDT doubled to 10%

Indirect Taxes

• No change in peak rate for CD non-agri products
• Eco friendly concessions to be prolonged till 2015
• Leather and goods duty reduced to 5%
• Luxury cars import duty at 100%
• Yachts duty at 25%
• Luxury motorcycle duty at 75%
• No change in customs duty of 10%
• No change in excise duty or service tax
• Precious, semi-precious duty reduced
• Luxury motor vehicles to be taxed more
• Baggage rules to permit bringing jewellery duty free limit raised to Rs 50000 for males and Rs 1 lakh for females

Miscellaneous

• For housing loans limit till Rs 25 lakh – additional Rs 1 lakh exemption for 2013-14 for first time loan takers
• Rs 50,000 cr tax free bonds to be allowed by select institutes
• Inflation indexed Bonds and NSCs to be issued
• SMEs to enjoy benefits for 3 years after they outgrow category
• Fiscal deficit contained at 5.2%; target set at 4.8%
• Direct benefit transfer scheme – 11 lakh have received benefits directly to bank accounts
• Revenue deficit estimated at 3.3%
• Seek same support of everybody to navigate the Indian economy through crisis
• Global economy has slowed from 3.9% to 3.2%
• Not unaffected what happens in the world
• Current year CSO has estimated growth at 5% and RBI at 5.5% – below India’s potential growth rate of 8%
• No reason for gloom or pessimism
• Only China and Indonesia are growing faster than India
• In 2013-14 only China will grow faster than India
• Indian economy growing below potential of 8%
• Goal of higher growth leading to inclusive and sustainable growth
• Plurality and diversity lead to inequitable distribution which needs to be addressed
• Women, SCs/STs and other backwards need to be included
• Need to create economic space and achieve socio-economic objective
• New Fiscal Consolidation measures undertaken to achieve 5.3%
• Current Account Deficit major worry
• CAD due to higher coal, oil and gold imports
• We have to find 75 bn dollar to finance current account deficit
• No solution but FDI, FII, ECB to bridge CAD
• Achieving high growth is not a novelty and beyond our capacity
• Without growth there will be no development and inclusiveness
• UPA govt believes in inclusive development with emphasis on improving human development index
• At present economic space is constrained
• India doesn’t have the choice between welcoming and spurning foreign investment
• Development must be sustainable and must have democratic legitimacy
• The battle against inflation must be fought on all fronts
• Our battle has brought down headline inflation to 7% and core inflation to 4%
• Wisdom lies in finding current level of govt expenditure
• Faced with huge fiscal deficit no choice but rationalise expenditure
• We have retrieved some economic space
• Sufficient funds to each ministry and departments
• One overarching goal of the budget is to create opportunities for youth
• Estimated expenditure Rs 1490925 lakh cr; Revised Rs 1430825 lakh cr
• Planned expenditure will be 29.4% more than previous; all projects to be fully funded
• Onus on ministries to completely projects in timely manner
• Rs 41561 cr for SC sub plan
• Rs 24500 cr to ST sub plan
• The funds for sub plan cannot be diverted
• Rs 77236 cr for child budget
• Rs 200 cr for gender equality
• Maulana Azad education foundation corpus gets Rs 160 cr more
• Rs 110 cr for dept of disable welfare
• Rs 37330 cr to ministry of health and family welfare out of which new national health mission to get Rs 21239 cr
• Rs 4727 cr for medical education, training
• Rs 1069 cr to department of ayush
• Rs 1650 cr to AIIMS like institutions
• Rs 65867 cr to HRD ministry
• Rs 27258 cr for Sarva Siksha Abhiyan
• Rs 3983 cr for Rashtriya Madhyamik Shiksha Abhiyan
• Rs 13215 cr for mid-day meal scheme
• Rs 17700 cr for children care and education
• Rs 15260 cr for clean drinking water
• Rs 1400 cr for water purification/ clean arsenic
• Rs 80195 cr for MNREGA, Indira Awas Yojna, NREGS
• PMGSY II to benefit states like Haryana, Punjab, Andhra Pradesh, Karnataka
• Rs 14800 cr for JNNURM
• Foodgrains production will be 250 mn tonne
• Earned Rs 138403 cr due to agri exports
• Rs 27049 cr for agri ministry
• New scheme for rural road development
• Rs 500 cr for crop diversification
• The avg growth of agri was 3.6%
• Agriculture to get over Rs 3000 cr
• Green Revolution in eastern India has been a remarkable success – Rs 1000 cr to these states
• Original Green Revolution states to get Rs 500 cr for crop diversification
• Watershed management to get Rs 5387 cr
• Rs 7 lakh agri credit target
• National Institute for Biotech in Raipur, Chhattisgarh
• National Livestock Mission to be launched in 2014 for which Rs 307 cr allocated
• National biotech centre at Ranchi
• National food security bill gets Rs 10000 cr towards incremental cost
• Rs 50 cr for FPOs
• Equity grants of Rs 10 lak per FPO
• Rs 1000 cr for eastern Indian states
• Rs 55 lakh cr needed for infra including private funds
• Infra Debt Funds will be encouraged; 4 already floated
• Rs 25,000 cr raised by institutions as tax free bonds in 2012-13
• WB help to be taken for NE states to be connected with Myanmar
• Godowns to be constructed with help of panchayats
• USD 1 trillion investment in infrastructure
• 47% of the cost will be shared by private sector
• Infrastructure debt funds will be encouraged
• 4 IDFs have been registered with SEBI
• To allow some institutions to raise money through tax free bonds to the total of Rs 50000 cr
• Rs 5000 cr for construction of warehouses
• Regulatory Authority to oversee road projects
• Zero CD for semi conductors/ electronics
• First time Rs 12 lakh income limit increased from Rs 10 lakh for MF s
• Rajiv Gandhi Equity scheme raised Rs 2 lakh cr
• Rs 5000 cr to NABARD to finance construction of warehouses, silos, cold storages
• New regulatory authority for road sector
• 3000 km of road projects in some states will be awarded in first 6 months of 2013-14
• Cabinet committee on investment to take up more projects
• FM to approve Rs 50,000 cr tax-free bonds in FY14; moving on to infra, he says CCI is the answer to all policy hurdles
• New instrument to save savings from inflation called as Inflation Index Bonds details of which will announced in due course
• Seven new cities on Delhi-Mumbai corridor
• New corridor is Bangalore-Mumbai industrial corridor
• Two new ports – in Sagar in WB and one in AP
• New outer harbour at Tuticorin through PPP
• 5 inland waterways have been declared as national waterways, one more announced in Assam
• Natural gas pricing policy would be reviewed
• 5 MMTPA terminals will be fully operational
• Non-tax benefits to be made available to MSMEs after they graduate to higher units
• Textile tech upgradation to get Rs 2400 cr
• Handloom workers to get working capital at concessional rates
• SIDBI gets Rs 500 cr
• Standing council of experts in ministry finance to analyse competitiveness of Indian financial sector
• 13 PSU banks to get Rs 14000 cr in 2013-14 as capital infusion
• All cooperative banks to be brought under CBS
• All PSU banks to have ATMS at their premises
• India’s first women bank as a PSU bank with Rs 1000 cr as initial capital
• New fund for urban housing to get Rs 2000 cr
• All towns with a population of 10000 or more will have a branch of LIC and one general insurance company
• Group insurance schemes to be available for teachers, nurses
• RSBY to be extended to rickshaw, autorickshaw, sanitation and mine workers
• Rs 50 cr for textile ministry for apparel park
• Rs 6000 cr for Rural Housing Fund
• SEBI Act amendment under consideration
• Investor with stake less than 10% will be taken as FII; more than that it will be taken as FDI
• New scheme to encourage waste to energy projects
• Clean and green energy is a priority
• KYC of banks sufficient for insurance
• Debt segment to be set up in Exchange
• Rs 800 cr for Ministry of Non Renewable Energy
• Hope Insurance and Pension Bills are passed soon
• Rs 6000cr for Rural Housing Fund
• Banks can act as insurance brokers
• Defense expenditure at Rs 2 lakh cr appx
• Rs 6275 cr for science and tech ministry
• Rs 5580 cr for dept for atomic energy
• Rs 100 cr each to AMU, BHU, Tata Institute of Social Sciences Guwahati, INTACH
• National Institute of Sports Coaching in Patiala
• Rs 532 cr for post offices to undertake banking activities
• Rs 5880 cr to DAE
• Over 800 FM channels will be auctioned
• Gadar memorial in San Francisco to be upgraded
• Donations to academic institutions and R&D to be treated as CSR
• Mutual Fund distributors can now become members of Stock Exchange
• Nirbhaya Fund for women’s security at Rs 1000 cr
• Insurance, Provident Funds can trade directly in debt segments of stock exchanges