Budget 2013 Highlights: Minor sops to Income Tax payers, surcharge on super rich


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Budget 2013 Highlights: Minor sops to Income Tax payers, surcharge on super rich

Last Updated: Friday, March 1, 2013, 15:53
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Zeebiz Bureau

New Delhi: Walking a tight rope ahead of next year's General Elections, Finance Minister P Chidambaram on Thursday did not tinker with the Income Tax slabs or rates while presenting the Union Budget 2013-14 in the Lok Sabha. As part of his tax proposals, he gave a benefit of Rs 2,000 to individual tax payers with taxable income of up to Rs 5 lakh.

Chidambaram also imposed a surcharge of 10% on those earning over Rs 1 crore in a year. This surcharge has been imposed on individuals, HUFs, firms and entities with a similar tax status. The surcharge would be payable for the 2013-14 fiscal only.

The Finance Minister announced that first-home buyer who takes a loan for an amount not exceeding Rs 25 lakh would be allowed an additional deduction of interest of Rs 1 lakh to be claimed in assessment year 2014-15 with spillover effect.

But in bad news for consumers, the Finance Minister made mobile phones, cigarettes and luxury vehicles costlier by hiking duties on these products.

Chidambaram also announced the setting up of Nirbhaya Fund for women safety and allocated Rs 1,000 crores to it.

In the earlier part of his speech, Chidambaram noted that the global economic growth has slowed, including that of India. He however added that high growth is a novelty and not beyond India's capacity.

Highlights of Union Budget for 2013-14

Personal Tax Corporate Tax Direct Tax
Indirect TaxTax Reforms Growth, Inflation
Fiscal Health Rural, Social Sector Agriculture, Food
Financial Sector, Banks Infrastructure Subsidy
Estimates Miscellaneous

Personal Tax
  • No case to revise either tax slabs or rates
  • Personal income tax slabs unchanged FY14
  • Some relief to tax payers in Rs 2 lakh to Rs 5 lakh bracket
  • Tax credit of 2,000 rupees for incomes of upto 5 lakh rupees
  • Surcharge of 10% on people with income over 10 mln rupees
  • Surcharge on high income tax payers only for one year
  • Only 42,800 tax payers with income over 10 mln rupees
  • Education cess to continue at 3%
  • Donation to national children fund to get 100% tax relief

Corporate Tax
  • 10% surcharge on cos with income above 100 mln rupees
  • Dividend distribution surcharge raised to 10% vs 5%
  • GAAR modified provisions seen effective Apr 1, 2016
  • 20% withholding tax on profits distributed by unlisted cos
  • Tax holiday for power plants extended to Mar 2014
  • Sops for power projects to continue for 1 year
  • 15% tax on dividend from overseas arms to continue
  • Financial institutions securitisation trust exempted from tax

Direct Taxes
  • Direct tax proposals to yield 133 bln rupee FY14
  • To introduce DTC Bill before end of Budget Session
  • To incorporate Jan decisions on anti-tax avoidance rule
  • Direct Taxes Code work in progress
  • Tax on MF redemption, purchase on exchanges cut to 0.001%
  • Agricultural land exempt from TDS on property deals
  • Royalty to overseas parents to attract 25% tax vs 10%
  • No income tax on investor protection fund of depositaries
  • 1% TDS on immovable property transfer of over 5 mln rupee

Indirect Taxes
  • Indirect tax proposals to yield 47 bln rupee FY14
  • No change in standard rate of excise duty
  • No change in peak basic custom duty rate on non-agri goods
  • No change in standard rate of service tax
  • Customs duty on leather making machine cut to 5.0% vs 7.5%
  • Transaction tax of 0.01% on non-farm commodities future
  • Commodity Transaction tax on non-farm derivatives trade
  • Transaction tax on equity futures cut to 0.01% vs 0.017%
  • Pegs FY14 customs revenue at 1.87 trln rupees
  • To impose service tax on all air-conditioned restaurants
  • Sops for low-cost housing to continue
  • Films exhibited in cinema halls to have no service tax
  • Moots voluntary compliance encouragement plan for service tax
  • Vocational courses exempt from service tax
  • Coir, jute handmade carpets exempt from excise duty
  • Farm produce testing service included in negative list
  • Export duty on rice bran oil, oil cakes withdrawn
  • To provide certain concessions to aircraft MRO industry
  • To up import duty on set-top boxes to 10% from 5%
  • Cut custom duty on leather footware machines to 5% vs 7.5%
  • Import duty on raw silk to be raised to 15% from 5%
  • 10% export duty on unprocessed ilmenite
  • 2% customs duty on bituminous coal
  • To up import duty on luxury cars to 100% from 75%
  • Import duty on yatchs raised to 25% from 10% now
  • Duty on 800CC motor cycles raised to 75% vs 60%
  • Zero excise duty on cotton, fibre
  • Handmade jute, coir carpets to be excise duty exempt
  • Zero excise duty on cotton at fibre stage
  • To up specific excise duty on all cigarettes by 18%
  • To raise excise duty on non-taxi SUVs to 30%
  • Female passengers can get 100,000 rupees duty-free gold
  • Male passengers can get duty-free gold worth 50,000 rupees
  • Ships, vessels exempted from excise duty
  • To up duty on mobile phones above 2,000 rupees to 6%
  • No change in mobile phone excise duty up to 2,000 rupees
  • Excise duty on marble hiked to 60 rupee/sq mtr vs 30 rupee
  • Basic customs duty on dehulled oatgrains cut to 15%
  • No change in 10% basic customs duty on non-farm products

Tax Reforms
  • To set up tax administration reform commission
  • Little room to raise taxes in constrained economy
  • Need for state and central govts to pass a GST law
  • Draft bill on GST in Parliament in next few months
  • 2 additions to service tax negative list
  • Include vocational courses in negative list
  • One-time amnesty scheme for service tax due from 2007
  • Allocates 90 bln rupee as CST compensation to states
  • To encourage voluntary compliance to boost service tax collection

Growth, Inflation
  • Final GDP growth rate would be lower than CSO, RBI view
  • CSO estimated FY13 GDP growth at 5%
  • RBI estimated GDP growth at 5.5% FY13
  • Overall GDP growth rate seen at 6.1-6.7% in FY14
  • Global economic growth slowed to 3.2% in FY12 from 3.9% FY11
  • Challenge to achieve trend growth rate of 8%
  • Only China to grow faster than India in FY14
  • Average GDP growth of 8% in 11th Plan
  • Growth is highest goal
  • Achieving high growth not beyond our capacity
  • No development, inclusiveness without high growth
  • Can achieve faster growth rates as seen earlier
  • Growth a necessary condition for development
  • Battle against inflation must be fought on all fronts
  • Food inflation is worrying
  • Govt spend is both good, bad from inflation perspective
  • Need to augment supply side to fight food inflation
  • Oilseed, pulses supply-demand mismatch pushes up inflation
  • No choice but to rationalise spending
  • Govt expenditure boosts aggregate demand
  • Efforts over last few months brought down WPI inflation to 7%
  • Efforts in last few months brought down core inflation to 4.5%
  • India can become 7th largest economy by 2017
  • Can become USD 5 trillion economy by 2025
  • We have achieved high growth before, can do it again
  • UPA govt believes in inclusive development

Fiscal Health
  • FY13 net short-term borrowing revised to 457 bln rupees
  • FY13 fiscal deficit estimate revised to 5.2% of GDP
  • Need to bring down fiscal deficit to 3% by FY17
  • FY13 revenue deficit revised at 3.9% of GDP
  • Need to bring down revenue deficit to 1.5% by FY17
  • Need to have zero effective revenue deficit FY17
  • FY13 divestment mop-up seen 240 bln rupees
  • FY13 gross market borrowing seen at 5.58 trln rupees
  • Pegs FY15 fiscal deficit at 4.2%; 3.6% in FY16
  • FY13 Plan expenditure was too ambitious
  • FY13 non-Plan expenditure too conservative
  • 12th Plan total expenditure revised to 14.31 trln rupees
  • FY13 Plan spend too ambitious, non-Plan too conservative
  • Fiscal consolidation can't be done only by spend cuts
  • Current account deficit high on gold, coal imports
  • Need to encourage foreign investment
  • Need USD 75 bln to finance current acct gap over next 2 yrs
  • Current account deficit high on oil imports
  • India doesn't have choice between FII and FDI
  • Foreign investment is an imperative
  • No choice but to encourage foreign investment
  • Faced with huge fiscal gap, no choice but curtail spend
  • Economic space constrained by high fiscal gap
  • Hope FY14 Budget will be testimony to inclusive growth
  • Exports, imports amount to 43% of GDP
  • Economic space constraints due to high fiscal deficit
  • Reliance on FX inflows to fund current acct deficit
  • Current account gap is greater worry
  • Gross domestic savings down 6% in FY12
  • To remove distrust in minds of investors
  • Will improve communication of our policies to investors
  • Doing business in India should seem mutually beneficial
  • Pvt sector remains main contributor to savings
  • Econ space constraints on low saving, tight RBI policy
  • Global crisis spared none
  • India not unaffected by what is happening in rest of world
  • There is no reason for gloom or pessimism

Rural, Social Sector
  • Giving enough funds to programmes for women, children
  • Allocate 415.61 bln rupees for Scheduled Castes sub-plan
  • Gender budget allot 971.34 bln rupees FY14
  • Funds for the sub-funds cannot be diverted
  • Allotment to minority ministry 35.11 bln rupees FY14
  • To allot more 2 bln rupee to child, women welfare ministry
  • To allot 373.3 bln rupees for health, family welfare
  • To allot 1.1 bln rupees to disability dept FY14
  • 373.3 bln rupees for health, family welfare in FY14
  • To allot 47.27 bln rupees for medical training & research
  • To allot 658.67 bln rupees to human resource ministry
  • 212.39 bln rupees in FY14 for new national health mission
  • Allocate 658.67 bln rupees to human resource department
  • Allot 16.5 bln rupees to 6 AIIMS-like institutes
  • FY14 for new national health mission allocation up 24%
  • Allot 272.58 bln rupees to Sarva Shiksha mission
  • To allot 272.58 bln rupees for Sarva Shiksha scheme
  • 132.15 bln rupees for mid-day meal scheme FY14
  • To create opportunities for youth to get skills for jobs
  • To allot 245.98 bln rupees to the tribal sub-plan
  • Allocate 415.61 bln rupees for Scheduled Castes sub-plan
  • To allot 772.36 bln rupees to child budget FY14
  • Allot for girl child development plan 52.84 bln rupees
  • To allot 177 bln rupees for child development scheme
  • Allocation for HRD 17% over FY13 revised estimate
  • To allot 152.6 bln rupees for drinking water, sanitation
  • Allot 177 bln rupees for early childhood care, education
  • 14 bln rupees for water purification plans FY14
  • To allot 801.9 bln rupees for UPA flagship schemes FY14
  • Allocates 330 bln rupees for rural employment scheme
  • To allot 151.84 bln rupees for Indira Awas scheme
  • To launch new scheme for rural road development
  • MNREGA allocation hiked to 330 bln rupees FY14
  • Allocates 148.73 bln rupees Nehru urban renewal mission
  • PM rural road scheme for Andhra, Maharashtra
  • PM rural road scheme for Haryana, Rajasthan
  • PMGSY allocation for FY14 at 217 bln rupees
  • 1.5 bln rupees for healthcare plan for elderly
  • To allot 115 bln rupees for Backward Region Fund
  • Skilled, trained youth to give enormous boost to economy
  • To give 10 bln rupees to skill development fund for youth
  • Made modest, cautious start for direct cash transfer Jan 1
  • Direct cash transfer scheme covered 1.1 mln people so far
  • Cities above 100,000 population to have pvt FM channels
  • Viability gap funds to city bodies for energy from waste
  • 115 bln rupees for backward regions grant fund FY14
  • To cut number of centrally-sponsored plans to 70 vs 173

Agriculture, Food
  • To allot 270.49 bln rupees for agri ministry FY14
  • FY14 farm credit target 7 trln rupees
  • To allot 34.15 bln rupees for agri research
  • Farm credit will top FY13 target of 5.75 trln rupees
  • Interest subvention for short-term farm loans to continue
  • Farm loan Interest subvention Plan to continue
  • 5 bln rupees for crop diversification programme
  • Farmers who repay loan on time will get loan at 4%
  • To allot 5 bln rupees for crop diversification programme
  • To spend 10 bln rupee on green revolution in east India
  • 10 bln rupees to eastern states for farm development
  • Rashtriya Krishi Vikas scheme to get 99.54 bln rupees FY14
  • Allot 22.5 bln rupees for food security mission
  • To allot 53.87 bln rupees for integrated watershed plan
  • 11th plan growth in farm sector was 3.6%
  • FY13 total food grain output over 250 mln tn
  • Farm exports were 1.384 trln rupees in Apr-Dec
  • To allot 50 bln rupees to NABARD for warehouses FY14
  • 2 bln rupees for pilot plan for nutri-farms
  • To allocate 10 bln rupees to rice-producing East states
  • Plant Protection Institute to be set up in Chhattisgarh
  • Indian Institute of Bio-Technology to be set up at Ranchi
  • To launch national livestock mission in FY14
  • Allot 750 mln rupee for coconut rejuvenation pilot plan
  • To allot 3.07 bln rupees for National livestock mission
  • 750 mln rupee more for revival of coconut palm in Kerala
  • Allot 100 bln rupees for food security plan FY14
  • Credit guarantee fund to be created for small farmers
  • 1 bln rupee credit guarantee fund for small farmers
  • Food security bill a promise of UPA govt

Financial Sector, Banks
  • To introduce investment allowance for high value invest
  • To introduce 15% investment allowance to attract invest
  • Rajiv equity plan to be eased; to cover MF investments
  • Rajiv Gandhi equity plan invest cap up by 200,000 rupees
  • 15% deduction for invest up to 1 bln rupees till FY15
  • Expect to raise 250 bln rupees via tax-free bonds FY13
  • Pvt sector infra investment seen 47% in 12th plan
  • To allow some institutions to issue tax-free bonds FY14
  • To OK 500 bln rupee tax-free bonds in FY14
  • To encourage infra debt funds to boost infra growth
  • PSU banks well regulated, must be adequately capitalised
  • To allot 140 bln rupees for capital infusion in PSU banks
  • 140 bln rupees to PSU banks for recapitalisation FY14
  • Will ensure PSU banks always meet Basel III norms
  • Gave 125 bln rupees to PSU bks for recapitalisation FY13
  • PSU banks assured all branches to have ATMs by Mar 2014
  • Plan to set up exclusive bank for women
  • To provide 10 bln rupees initial capital for women's bank
  • Plan council for international competitiveness of financial sector
  • To allot 60 bln rupees for rural housing fund under NHB
  • License to women bank by Oct 2013
  • To provide 60 bln rupees for rural housing fund
  • 20 bln rupee allocation to create urban housing fund
  • NHB to set up urban housing fund
  • KYC of banks sufficient for insurance policies
  • Insurance cos can open Tier 2 city branch without IRDA nod
  • Banking correspondence can sell micro-insurance products
  • Towns with 10,000 people to have LIC, GIC offices
  • Inflation indexed bonds to be introduced
  • To launch inflation-indexed certificates
  • To introduce inflation linked instruments
  • Scope of Rashtriya Swasthya Bima Yojana to be expanded
  • Hope insurance, PFRDA bill will be passed in this session
  • India capital market best regulated
  • OK to FII to trade in exchange traded FX derivatives
  • SEBI to ease norms for foreign portfolio investment
  • Allow FIIs to use corporate bond income for margin need
  • SMEs will be allowed to be listed without IPO
  • FII status for investment less than 10% in a company
  • FDI status for investment over 10% in a company
  • Distributors can become members of exchanges' MF segment
  • Stock Exchanges to have dedicated debt segment
  • MF distributors allowed to become stock exchange members
  • Insurance, pension cos can directly trade in debt segment
  • Exchanges can introduce dedicated debt segment
  • ETFs will be eligible for pension, insurance investment
  • Post offices to move to core banking solutions
  • To give 5.32 bln rupees for core banking at post offices
  • 5.3 bln rupees to post offices for core banking solution
  • To allot 3 bln rupees for mother, child nutrition plan

  • IIFCL, ADB to offer credit enhancement for infra cos
  • Rural Infra Dev Fund corpus raised to 200 bln rupees
  • To set up regulatory authority for road sector
  • Road construction facing financial stress
  • To set up regulatory body for road sector
  • Revival of invest in manufacturing sector a key challenge
  • 30 bln rupee road projects to be awarded in Apr-Sep
  • To allot 148.73 bln rupees for JNNURM
  • To use bulk of Nehru urban renewal Plan for buying buses
  • To buy 10,000 buses from fund of Nehru urban renewal plan
  • Infra debt funds to be encouraged
  • 12th plan projects $1 trln for infra invest
  • 1.51 trln rupees for textile upgradation fund 12th Plan
  • Allocates 500 mln rupees to set up apparel parks
  • 960 mln rupees for interest subvention in textile FY14
  • Loans at 6% rate for women textile entrepreneurs
  • Assure support to commerce ministry to boost exports
  • Initial work on Chennai-Bengaluru corridor started
  • To give Delhi-Mumbai corridor more funds if needed
  • To set up 2 new ports at Andhra Pradesh, West Bengal
  • 2 ports at Andhra, W Bengal to add 100 mln tn capacity
  • To have Bengaluru-Mumbai Industrial corridor
  • Plan grid connecting waterways, roads, ports
  • Delhi-Mumbai Industrial Project has made rapid progress
  • Oil, gas policy to move to revenue sharing model
  • Natural gas pricing policy to be reviewed
  • Work on 2 new smart industrial cities will start FY14
  • Natural gas policy will be reviewed
  • To announce policy on Shale gas exploration
  • Shale gas projects to be encouraged
  • To move oil E&P pacts to revenue sharing from profit sharing
  • Must reduce dependence on imported coal
  • 5 mtpa LNG terminal to be fully operational in FY14
  • Coal import estimated to rise to 185 mln tn by FY17
  • To cut dependence on coal import in medium-, long-term
  • States must prepare plans immediately for power distribution cos
  • Urge state govts to approve recast of electricity boards
  • To give 5 bln rupee to SIDBI for factoring loan guarantee
  • To double SIDBI's refinance capacity to 100 bln rupees
  • Non-tax sop to MSME to stay 3 yr post move to higher class
  • Non-tax benefits to MSME for 3 yrs after moving higher
  • MSME benefits to stay 3 yrs post move to higher category
  • Textile tech upgrade scheme to get 24 bln rupees FY14
  • Additional tax sop for first time home owners
  • Up to 2.5 mln rupee 1st home loan to get more tax cut
  • No custom duty for plant, machinery for semi-conductors
  • Wind energy sector deserves incentives
  • Generation-based incentives for wind energy projects
  • To expand pvt FM stations to 294 more cities
  • 294 more cities to be connected by FM radio
  • To auction 839 more radio channels in FY14

  • FY14 total subsidy seen 2.31 trln rupees
  • FY14 petroleum subsidy seen 650 bln rupees
  • FY13 petroleum subsidy seen 969 bln rupees
  • FY14 food subsidy seen 900 bln rupees
  • FY13 food subsidy seen 850 bln rupees
  • FY13 fertiliser subsidy seen 660 bln rupees
  • FY14 fertiliser subsidy seen 660 bln rupees

  • FY14 total spend pegged at 16.65 trln rupees
  • FY14 total Plan spend pegged at 5.55 trln rupees
  • FY14 Plan spend 29.4% more than FY13 revised estimates
  • FY14 non-Plan expenditure estimated 11.09 trln rupees
  • FY14 gross market borrowing seen at 6.29 trln rupees
  • FY14 net market borrowing seen at 4.84 trln rupees
  • FY14 fiscal deficit projected at 4.8% of GDP
  • FY14 revenue deficit projected at 3.3% of GDP
  • FY14 total capital receipts seen at 6.09 trln rupees
  • Pegs FY14 excise revenue at 1.975 trln rupees
  • FY14 divestment mop-up aim at 400 bln rupees
  • Pegs FY14 svc tax revenue at 1.80 trln rupees
  • Pegs FY14 non-tax revenue at 1.72 trln rupees
  • FY14 divest mop-up in non-government cos seen 140 bln rupees
  • FY14 short-term borrowing pegged 198.4 bln rupees
  • FY14 gilt redemptions seen at 1.45 trln rupees
  • FY14 nominal GDP growth pegged 13.4%
  • Pegs FY14 gross tax revenue at 12.36 trln rupees
  • Pegs FY14 corporate tax revenue at 4.195 trln rupees
  • Kept 500 bln rupees for gilt buyback/switch
  • Gilt buyback/switches for better debt management
  • Miscellaneous capital receipts pegged 558.14 bln rupees
  • FY14 total non-debt receipts pegged 664.68 bln rupees
  • Net MSS receipts pegged 200 bln rupees
  • FY14 external assistance pegged 105.6 bln rupees
  • FY14 small savings receipt seen at 57.98 bln rupees
  • FY14 recovery from loans, advances seen 106.54 bln rupees
  • FY14 defence allocation 2.03 trln rupees
  • 867.4 bln rupees in FY14 for defence CAPEX
  • To allot 62.7 bln rupees to science, technology ministry
  • Allocate 39.83 bln rupees for high school education scheme
  • 58.8 bln rupees for department of atomic energy
  • To allot 56.15 bln rupees to Department of Space
  • Transfer to state, Union Territories 5.87 trln rupee FY14

  • Initiatives underway to ensure women security
  • Allot 10 bln rupees for 'Nirbhaya' women safety fund
  • To set up national institute of sports coaching
  • To provide 2.5 bln rupees for sports university at Patiala
  • Allot 2.5 bln rupee to sports coaching institute over 3 yr
  • Grant 1 bln rupee each to four universities
  • 1 bln rupee grant each to Aligarh, Banaras universities
  • Allocate 1 bln rupee grant to TISS, Guwahati

First Published: Thursday, February 28, 2013, 08:08


its very important for methanks-nitesh gujwar -nagpur
Please income tax slab for the year 2013-14,alongwith exemption and rebate Also Rate, deductions and exemption applicable to senior and super senior citizens-V.v.balasubramanian -Chennai
please send income tax slab for fy 2013-14 along with tax rebate and exemption for fy 2013-14-jaydip basu -kharagpur
This is very usefull to gaining knowledge-JEGAN.K -NAGAPATTINAM- CHENNAI
On 28th Feb, I have read the highlights in which you have mentioned that ``Long-term infra bonds also eligible for tax deduction`` which is not available now Pls Clarify-Arul Prakash D -Chennai
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