Union Budget 2013-2014 - Synopsis

GENERAL:

Finance Minister says:

·  Current Account Deficit is a bigger worry than Fiscal Deficit - Reason being excessive dependence on oil, coal and gold imports and slowdown in exports

·   Economy has slowed down after 2010

·  30% increase in Plan expenditure

·  17% hike in Education allocation

·  Health and education for all remain our priorities

·  Main aim of the budget is to create opportunity for the youth. One overarching goal to provide education and skills to youth for securing jobs in the 2013-14

·  Food inflation is worrying

·  Indian Institute of Biotechnology will be set up at Ranchi.

·  Increase in allocation for Defence to 2.36 lakh crore

·  Modified provisions under GAAR effective April 1, 2016

FINANCE:

·   Additional allocation of Rs. 10,000 crore for Food Security

·  To approve Rs. 50,000 crore Tax-Free Bonds for some companies

· To introduce Inflation Indexed Instruments

·  Housing loans up to Rs 25 lakhs (taken in 2013-2014) will be allowed additional deduction of interest of 1 lakh. (Low Cost Housing Scheme)

·  All Women’s Bank to be set up via public sector

·  Banks permitted to act as Insurance Brokers

· KYC of banks sufficient to acquire Insurance policies

·  MF distributors allowed to become Members of Stock Exchanges

·  FII will be allowed to participate in currency derivatives segment

INFRASTRUCTURE:

·  Two new major ports to be set up — one in West Bengal and the other in Andhra Pradesh

·  Waste-to-energy projects will be financed by PPP mode

·  Generation-based incentives for wind energy projects

·  Low cost finance provided for viable renewable energy projects

·  To constitute Regulatory Authority for Roads Sector

·  NHB to set up Urban Housing Fund

· To target $1 trillion in Infrastructure in the 12th Plan

·  Infrastructure Debt Funds to be encouraged for Infrastructure growth

·  Rs 14,873 crore for JNNURM for urban transportation in 2013-14 against Rs 7,880 crore in the current fiscal

·  Tax holiday for power plants extended to March 2014

·  TDS at 1% of land deals over 50 lakh

DIRECT TAX:

·  Direct Tax Rates and Slabs remain unchanged

·  Tax Administration Reforms Commission to be set up

·   Donations to National Children Fund will get 100% tax exemption

INDIVIDUALS:

Tax Slabs remain unchanged

Income up to Rs 2 lakh: NIL tax

Income between Rs 2- 5 lakh: Tax at 10%

(Tax Credit of Rs. 2000 for incomes upto Rs. 5 lakhs) 

Income between 5-10 lakh: Tax at 20%

Income above Rs 10 lakh: Tax at 30%

* Super Rich Tax - 10% Surcharge on taxable incomes above Rs. 1 crore (to remain only for a year)

* Education Cess of 3% continues

Corporates:

* 10% Surcharge on company incomes above Rs. 10 crore

Dividend Distribution Tax raised to 10% from 5%

20% final withholding tax on unlisted companies

INDIRECT TAX:

·  No change in Standard rate of Customs and Excise Duty

·   Service tax rates remain unchanged at 12%

·  Reduction in securities transaction tax (STT) on equity futures to .01% from .017%

·   To exempt vocational courses, testing services from Service Tax

·  Service Tax on all AC Restaurants

Disclaimer: This Synopsis prepared by Anand Wadadekar, has been prepared with utmost care and accuracy, however errors or omissions cannot be fully ruled out and the Author is not responsible for the same. The recipient is advised to go through the original Finance Bill if required.

Best Regards

Anand Wadadekar

Faculty In-Charge --- PGPIB

B.Com, M.A. Eco, PGDFB (SIBM), AMFI, DIT, GCIPR, MS-CIT

SAMVIT School of Infrastructure Business