Budget 2013-14: Quick Highlights

Here are some quick pointers from common man’s perspective for Budget 2013-14. I have added my thoughts in italics.

Income Tax:

  • 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.

Stock Markets:

  • 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

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