UNION BUDGET 2013: HIGHLIIGHTS

Income Tax-

Honorable Finance Minister P Chidambaram on Thursday did not change

the income-tax slabs for individual taxpayers, but announced a tax credit of Rs.
2,000 for individuals earning up to Rs. 5 lakhs. Honorable Mr. Chidambaram
announced a 10 per cent surcharge on individuals whose taxable income is more
than Rs. 1 crore.

These are the current tax slabs:

Income up to Rs. 2 lakh -- Nil

Income above Rs. 2 lakh and up to Rs. 5 lakh -- 10 per cent

Income above Rs. 5 lakh and up to Rs. 10 lakh -- 20 per cent

Home loan –

A person taking a loan for his first home from a bank or a housing finance
corporation up to Rs 25 lakh during the period April 1, 2013 to March 31, 2014
will be entitled to an additional deduction of interest of up to Rs 1 lakh. If the
limit is not exhausted, the balance may be claimed in 2015-16. This deduction
will be over and above the deduction of Rs 1.5 lakh allowed for self-occupied
properties under section 24 of the Income-tax Act

Costlier –

Sports utility vehicles, imported cars and motorcycles, high-end

mobile phones, eating out at air-conditioned restaurants and cigarettes will
become costlier with finance minister P Chidambaram deciding to impose
higher taxes on these items. Set top boxes will also become costlier with
basic customs duty on the item has been increased 10 per cent from 5 per
cent Cigarettes - Increase the specific excise duty on cigarettes by about 18
per cent

Cheaper –

Branded apparels will become cheaper as there will be zero

excise duty on the item. Jewelry – Gold, silver

Union Budget 2013: Quick Snapshot

 Carpets and other textile floor coverings of coir or jute will also
become less expensive as they have been fully exempted from excise duty.

Moreover, precious stones will become cheaper as the basic customs

duty has been cut to 2 per cent from 10 per cent on pre-forms of precious
and semi-precious stones

Imported hazel nuts will also become cheaper as the customs duty has
been reduced to 10 per cent from 30 per cent. Similarly, dehulled oat grain
will also be less expensive as customs duty has been cut to 15 per cent from
30 per cent earlier

Duty free –

The duty free allowance on jewellery for an Indian passenger, who

has been residing abroad for over one year or a person who is
transferring residence to India, has been raised to Rs 1 lakh in case of a
lady passenger from Rs 50,000 earlier.

For a male passenger, this has been raised to Rs 50,000 from Rs 10,000

Other highlights –

FISCAL DEFICIT

* Fiscal deficit seen at 5.2 pct of GDP in 2012/13

* Fiscal deficit seen at 4.8 pct of GDP in 2013/14
* Faced with huge fiscal deficit, India had no choice but to rationalize
expenditure

GROWTH

* India faces challenge of getting back to its potential growth rate of 8 pct
* India must unhesitatingly embrace growth as highest goal

SPENDING

* Total budget expenditure seen at 16.65 trillion rupees in 2013/14

* India's 2013/14 plan expenditure seen at 5.55 trillion rupees
* Non-plan expenditure estimated at about 12 trillion rupees in 2013/14
* Revised estimate for total expenditure is 14.3 trillion rupees in 2012/13,
which is 96 pct of budget estimate
* Set aside 100 billion rupees towards spending on food subsidies in
2013/14

CURRENT ACCOUNT DEFICIT

Union Budget 2013: Quick Snapshot

 * India's greater worry is the current account deficit - will need more than
$75 billion this year and next year to fund deficit

INFLATION

* Food inflation is worrying, will take all steps to augment supply side

TAX

* Proposes surcharge of 10 pct on rich taxpayers with annual income of

more than 10 million rupees a year
* To increase surcharge to 10 pct on domestic companies with annual
income of more than 100 million rupees
* Education cess to continue at 3 pct

CORPORATE SECTOR AND MARKETS

* Plans to issue inflation-indexed bonds * Proposes capital allowance of 15

pct to companies on investments of more than 1 billion rupees
* Foreign institutional investors (FIIs) can use investments in corporate,
government bonds as collateral to meet margin requirements
* Insurance, provident funds can trade directly in debt segments of stock
exchanges
* FIIs can hedge forex exposure through exchange-traded derivatives
* Investor with less than 10 pct stake in a company will be regarded as FII,
more than 10 pct stake as FDI (foreign direct investment)
* Stock exchange regulator will simplify know-your-customer norms for
foreign portfolio investors
* To implement quickly recommendations of financial sector legislative
reforms commission

POWER AND ENERGY SECTOR

Proposes zero customs duty for electrical plants and machinery

Proposes to move to revenue-sharing from profit-sharing policy in oil and
gas sector

BANKING

* To provide 140 billion rupees capital infusion in state-run banks in

2013/14
* To allocate 10 billion rupees for India's first women's bank

DEFENCE

* To allocate 2.03 trillion rupees to defense in 2013/14

AGRICULTURE

Union Budget 2013: Quick Snapshot

 * To allocate 801.94 billion rupees to rural development in 2013/14
* Plan to allocate 270.49 billion rupees for agriculture in 2013/14

Union Budget 2013: Quick Snapshot