The Union Budget for 2013-14 aims at higher growth rate leading to inclusive and sustainable development as ‘mool mantra’.
Direct Tax
• Income limit under Rajiv Gandhi Equity Savings Scheme (RGESS) will be raised from Rs. 10 lakh to Rs. 12 lakh.
• First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 lakh.
Modified GAAR to come into effect from 01.04.2016
DTC to be brought before the end of the Budget Session
CTT on non agri futures at 0.01%
Agri commodity futures exempt from CTT
Securities Transaction Tax on shares cut.
More efforts to encourage e-filing of returns
Tax incentives for power sector to continue for one more year
1% Additional Tax on Sale Purchase of Property above Rs. 50 Lakh but No tax on sale/purchase of Agricultural land
TDS of 1% to be levied on transactions of immovable property of above Rs 50 lakh
Education cess to continue
Raised surcharge for only one financial year
• A surcharge of 10 percent on persons (other than companies) whose taxable income exceeds Rs. 1 crore have been levied.
• Relief of Rs. 2000 for the tax payers in the first bracket of 2 to 5 lakhs.
Imposes 5-10% surcharge on local companies income above Rs 10 crore
No Change in Income Tax Tax Slabs – Tax slab of 10%,20%, 30% remains unchanged
More tax incentives for wind energy.
Tax Free Bonds – FM announces Rs 50,000 crore of tax free bonds to raise money for infrastructure.
Indirect Taxes
Service Tax on AC Restaurants
2% customs, CVD on coal imports
Excise duty raised by18% for cigarettes
Cut abatement rate on expensive homes to 75%
Customs duty unchanged for non agri products
Extend tax benefit to electrical vehicles
Excise duty on SUVs raised from 27% to 30%. Will not apply to SUVs registered as taxis
Amnesty Scheme for Service Tax Defaulters
Exempts imported ships and vessels from duty
Excise Duty cut on leather, leather good machines
No Change in Normal Rate of Service Tax & Excise Duty
Import Duty Hiked on Set top boxes
General
• Finance Minister makes three promises: to women, youth and the poor.
• Nirbhaya Fund to empower women and to keep them safe and secure.
• Proposal to set up India’s first Women’s Bank as a public sector bank.
• Rs. 1,000 crore for skill development of ten lakh youth to enhance their employability and productivity.
• Direct Benefit Transfer (DBT) Scheme to be rolled out throughout the country during the term of UPA Government.
• Fiscal Deficit for 2013-14 is pegged at 4.8 percent of GDP. The Revenue Deficit will be 3.3 percent for the same period.
• Plan Expenditure placed at Rs. 5,55,322 crore. It is 33.3 percent of the total expenditure while Non Plan Expenditure is estimated at Rs. 11,09,975 crore. The plan expenditure in 2013-14 will be 29.4 percent more than the RE of the current year i.e. 2012-13.
• Substantial rise in allocation to the social sector. Allocation for Rural
•Development Ministry raised by 46 percent to Rs. 80,194 crore.
• The target for farm credit for 2013-14 has been set at Rs. 7,00,000 crore against Rs. 5,75,000 crore during the current year.
• Rs. 10,000 crore earmarked for National Food Security towards the incremental cost.
• Education gets Rs. 65,867 crore, an increase of 17 percent over RE for 2012-13.
• ICDS gets Rs. 17,700 crore. This is 11.7 percent more than the current year.
• Drinking water and sanitation will receive Rs. 15,260 crore. Rs. 1,400 crore is being provided for setting up water purification plants to cover arsenic and fluoride affected rural areas.
• Health and Family Welfare Ministry has been allotted Rs. 37,330 crore. National Health Mission will get Rs. 21,239 crore which represents 24.3 percent over the RE.
• The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will receive Rs. 14,873 crore as against RE of Rs. 7,383 crore in the current year.
• Defence has been allocated Rs. 2,03,672 crore.
• Rs. 3,511 crore have been earmarked to Minority Affairs Ministry, 60 percent higher than RE for 2012-13.
• The Government will encourage Infrastructure Debt Fund (IDF) and allow some institutions to raise tax free bonds upto Rs. 50,000 crore which is 100 percent more than the current year.
• India Infrastructure Finance Corporation (IIFC), in partnership with ADB will help infrastructure companies to access bond market to tap long term funds.
• Proposal to launch Inflation Indexed Bonds or Inflation Indexed National Security Certificates to protect savings from inflation.
• On oil and gas exploration policy, the Budget proposes to move from the present profit sharing mechanism to revenue sharing. Natural gas pricing policy will be reviewed.
• On coal, the Budget proposes adoption of a policy of pooled pricing.
• Benefits or preferences enjoyed by MSME to continue upto three years after they grow out of this category.
• Refinancing capacity of SIDBI raised to Rs. 10,000 crore.
• Technology Upgradation Fund Scheme (TUFS) for textile to continue in 12th Plan with an investment target of Rs. 1,5 1,000 crore.
• Rs. 14,000 crore will be provided to public sector banks for capital infusion in 2013-14.
• A grant of Rs. 100 crore each has been made to 4 institutions of excellence including Aligarh Muslim University, Banaras Hindu University, Tata Institute of Social Sciences, Guwahati and Indian National Trust for Art and Cultural Heritage (INTACH).
• New taxes to yield Rs. 18,000 crore.
• Tobacco products, SUVs and Mobile Phones to cost more.
• ‘Voluntary Compliance Encouragement Scheme’ launched for recovering service tax dues.
• Rs. 9,000 crore earmarked as the first installment of balance of CST compensations to different States/UTs.
