Here are some quick pointers from common man’s perspective for Budget 2013-14. I have added my thoughts in italics.
- No revision in income tax tax rates. The tax slab remains the same as of last year. Click here to view the Tax slabs for FY 2013-14 (same as FY 2012-13).
- Education cess to continue.
- Tax credit of Rs 2,000 for income up to Rs 5 lakh.
- Surcharge of 10% on Rs 1 crore plus income earners. Raised surcharge for only one financial year. Fact: Only 42,800 people with taxable income over Rs 1 crore in India.
- The much awaited DTC (Direct Tax Code) remains work in progress.
RGESS (Rajiv Gandhi Equity Savings Scheme):
- RGESS will be liberalized & the investor will be allowed to invest in mutual funds.
- The investor will be able to do this for a period of 3 successive years.
- The limit for investors wanting to invest in RGESS raised from Rs 10 lakh to Rs 12 lakh.
This is good move and would be safer for new investors.
- People taking a home loan in 2013-14 for an amount up to Rs 25 lakh will be allowed an additional deduction of Rs 1 lakh. Hopefully would give push to affordable housing.
- Immovable Property transaction: TDS of 1% to be levied on transactions above Rs 50 lakh. Government is trying to curb black mney generation in property deals.
- India’s first women’s Public sector bank to be set up. Woman’s bank license to be in place by Oct, 2013
- All PSU banks branches to have ATMs by March, 2014
- KYC of banks will be sufficient to acquire insurance policies
Tax Free Bonds:
- Tax Free Bonds – Will allow some organisations to raise funds strictly based on need.
Inflation Indexed Bonds:
- In consultation with RBI, the FM proposes to introduce inflation indexed bonds or certificates.
- The details will be announced later.
This is good move and hopefully would benefit retail investors and reduce investment in Gold to an extent.
- Pension funds will be allowed to invest in ETFs. This would give a boost to stock markets and also give higher returns to pension funds.
- STT (Securities Transaction Tax) rates cut on equity futures to 0.01% from 0.017%
Duties and Indirect Taxes:
- One time amnesty scheme for service tax defaulters due from 2007
- Higher customs duty on set top boxes from 5% to 10%
- Excise duty on SUVs raised from 27% to 30%. Will not apply to SUVs registered as taxis
- Customs duty unchanged for non agri products
- Extend tax benefit to electrical vehicles
- Increase in import duty on high end motor vehicles from 75% to 100%; and on motor cycles from 60% to 75%
- Service tax to be levied on all air conditioned restaurants
- Excise duty raised by18% for cigarettes
- For phones priced at more than Rs 2,000, the duty is increased to 6%
- To exempt vocational courses, testing services from Service Tax
- Gold duty free limit raised to Rs 50,000 for men and to Rs 1 lakh for women travellers
- To launch two new industrial cities in Gujarat and Maharashtra
- Indian Institute of Biotechnology will be set up at Ranchi
- To expand private FM radio to 294 cities