Highlights/Review of Union Budget 2013

IndianMoney.com Research Team | Updated On Monday, November 17,2014, 04:10 PM

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Direct Taxes

5% surcharge on domestic companies whose income exceeds Rs 1 crore
10 % surcharge on domestic companies whose income exceeds Rs 10 crores
Surcharge on Dividend Distribution Tax (DDT) increased from 5 % to 10%
Securities Transaction Tax (STT) rates cut on equity futures to 0.01% and for Mutual Funds to 0.001 %
Commodities transaction tax (CTT) levied on non-agriculture commodities futures contracts at 0.01%
Additional Income tax of 20 % for buyback of shares by Unlisted Companies except for buyback of shares on face value
Tax on Royalty / Fees for technical for services provided abroad increased from 10% to 25 % subject to Double Taxation Avoidance Agreements
Modified GAAR norms to be introduced from April 1, 2016
Donations to National Children’s Fund will be eligible for 100% tax deduction
Long-term infra bonds also eligible for tax deduction
Direct Tax Bill to be placed soon

Customs Duty

No change in Peak basic customs duty of 10%
Leather and goods duty reduced to 5%
Higher duty on imported vehicles

->  Luxury cars import duty at 100%
->  Import duty on Yachts duty at 25%
->  Import duty on motorcycle at 75%
Precious, semi-precious duty reduced
Exempts imported ships and vessels from duty
Duty cut on leather, leather good machines
To levy 2% customs, CVD on coal imports
Higher customs duty on set top boxes from 5 % to 10 %
Customs duty unchanged for non agri products
To provide appropriate incentives for semiconductors industry including zero customs duty on plants and machineries.

Excise Duty

No change in Excise duty of 12%
No countervailing duty on ships and vessels
Specific excise duty on cigarettes and cigars raised by 18 per cent
Excise duty on SUVs to be increased to 30 per cent from 27 per cent, SUVs registered as taxis exempted
Duty on mobiles above Rs 2,000 raised from 1 to 6 %, based on their maximum retail prices

Service Tax

No change in Service tax rate of 12%
One time voluntary compliance scheme for service tax defaulters to be introduced for unpaid service tax since 1-10-07. Interest and penalties to be waived and payment may be made in 1 or 2 instalments
Service tax to be levied on all AC restaurants (whether serving liquor or not)
2 Services added in Negative List

-> Vocational courses affiliated to Institute of Vocational Studies
-> Testing for Agriculture products

Personal Taxation (Direct and Indirect)

No changes in personal Income Tax slabs
Tax credit of Rs 2000 for income upto Rs 5 lakh
Additional 10% surcharge would be levied on those whose taxable income is above Rs 1 cr per annum
TDS of 1% to be levied on transactions above Rs 50 lakhs on transfer or sale of immovable property; agricultural land exempt
Educational Cess to continue at 3 %
Additional deduction of interest of Rs. 1 lacs for 1st time Home buyers for loans less than Rs. 25 lacs
Duty free limit in personal baggage on gold raised to Rs 50,000 in case of male and Rs 100,000 in case of female
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.

Goods and Services Tax (GST)

Draft bill on constitutional amendment and for GST to be placed in 2013
9000 crores compensation package for states for foregoing CST

Capital Markets

SEBI to simplify KYC norms governing foreign investors
Small and medium companies to be allowed to listed on MSME exchange without making a public offer
Investor with stake of 10 per cent or less will be treated as FII; any stake more than 10 per cent will be treated as FDI. Committee to be constituted to proposes amendments in the regulations based on the said principle.
FIIs will be allowed to participate in exchange traded currency derivatives
Designated Depository Participants free to register different classes of portfolio investors
Dedicated Debt segment on Stock Exchanges

SME Segment / Start-ups

In order to encourage SMEs a company investing Rs 100 crore or more in plant and machinery in April 1, 2013 to March 31, 2015 will be allowed 15 % investment deduction allowance apart from depreciation
SIDBI’s re-financing facility to MSMEs will be doubled to Rs 10,000 crore.
Small and medium companies to be allowed to listed on MSME exchange without making a public offer
Funds provided by Companies to Technology incubators like Campus in Technology institutions approved by Ministry of Science and Technology to qualify as a valid Corporate Social Responsibility (CSR) expenditure in line with the new Companies Bill.
SMEs to enjoy non tax benefits for 3 years after they outgrow category

Infrastructure Sector

Infrastructure Debt Funds (IDF) to be encouraged. Four infrastructure debt funds have been registered with SEBI; two more planned
Tax free bonds issue to be allowed up to Rs 50,000 crore in 2013-14 strictly on capacity to raise funds from the market
Government has decided to constitute a regulatory authority for the road sector

Banking / Finance / Insurance Sector

India’s first women’s bank to be set up as a public sector bank by October 2013 with an initial capital of 1000 cr.
Banks allowed to act as Insurance Brokers
Banks KYC norms sufficient for insurance policies
Group Insurance benefits to be extended to several new groups
All PSU Banks to have ATMs in one year
Post Offices to offer Core Banking Solutions
PFRDA and Insurance Laws amendment bills to tabled in the budget session
NHB to set up Urban Housing Bank
Inflation indexed Bonds and NSCs to be issued

Non-renewable energy Sector

Low interest rate funds to be provided from Clean Energy Fund for green projects for a period of five years
Generation based incentives to wind energy projects reintroduced

Miscellaneous

Nirbhaya Fund to be constituted with a corpus of Rs. 1000 cr for women safety and security
Auction of 839 new FM channels licenses to cover all cities with a population of > 1 Lac
National Skill Development Corporation to formulated for Training Curriculum
Direct Benefit Transfer Scheme for Poor to continue

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Highlights/Review of Union Budget 2013

IndianMoney.com Research Team | Updated On Monday, November 17,2014, 04:10 PM

Direct Taxes

Customs Duty

Excise Duty

Service Tax

Personal Taxation (Direct and Indirect)

Goods and Services Tax (GST)

Capital Markets

SME Segment / Start-ups

Infrastructure Sector

Banking / Finance / Insurance Sector

Non-renewable energy Sector

Miscellaneous

Get free Personalized Money tips!

IndianMoney.com Research Team

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