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28th February 2013 *

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BUDGET 2013-14 SPECIAL

Finance Minister P Chidambaram presented his 8th Union Budget and 82nd for the country on 28th February 2013.

DIRECT TAX

Personal tax rates/slabs remain unchanged

Tax credit of Rs 2,000 for individuals having total income up to Rs 5 lakh (Section 87 has also been consequentially

amended).

No change in tax rates for companies

Person taking home loan for the first time will get tax cut of Rs 1 lakh [the amount of loan sanctioned does not exceed

Rs. 25lakhs Section (inserting a new section 80EE in the Income-tax Ac)]

No change in Education Cess

Sunset clause has been extended till 31 March 2014 for undertaking engaged in generation and / or distribution /

transmission of power.

GAAR guidelines effective from 1/4/2016 – recommendation of Shome Committee to be incorporated

Rules on Safe Harbor to be introduced

DTC to be finalized – Bill to be introduced before end of budget session

No change in Custom Duty/Excise Duty

Donations made to National Children Fund eligible for 100 percent deduction.

Investment allowance at the rate of 15 percent to manufacturing companies that invest more than Rs.100 crore in plant

and machinery during the period 1.4.2013 to 31.3.2015.

Concessional rate of tax of 15 percent on dividend received by an Indian company from its foreign subsidiary proposed

to continue for one more year.

A final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to shareholders through

buyback of shares.

SURCHARGE

Increase surcharge from 5% to 10% for domestic company whose income is above 10cr

Increase surcharge from 2% to 5% for foreign company

DDT – increase surcharge from 5% to 10%

Persons/HUF whose taxable income of over Rs 1cr – surcharge of 10%

Additional surcharges to be in force for only one year.

TDS

TDS at 1% on transfer of immovable property where consideration exceeds Rs 50L

TDS of 20% on buy back of shares

TDS of royalty /FTS to non-residents 10% to 25%

Agricultural land to be exempted.

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INDIRECT TAX

No change in the normal rates of 12 percent for excise duty and service tax.

No change in the peak rate of basic customs duty of 10 percent for non-agricultural products.

CUSTOMS

Period of concession available for specified part of electric and hybrid vehicles extended upto 31 March 2015.

Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5

percent.

Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 percent.

Export duty on de-oiled rice bran oil cake withdrawn.

Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on ungraded ilmenite.

Concessions to air craft maintenance, repair and overhaul (MRO) industry.

Duty on Set Top Boxes increased from 5 to10 percent.

Duty on raw silk increased from 5 to 15 percent.

Duties on Steam Coal and Bituminous Coal equalised and 2 percent custom duty and 2 percent CVD levied on both

kinds coal.

Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.

Duty free gold limit increased to Rs.50,000 in case of male passenger and Rs.1,00,000 in case of a female passenger

subject to conditions.

EXCISE DUTY

Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun yarn made

of manmade fibre, duty of 12 percent at the fibre stage.

Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.

To provide relief to ship building industry, ships and vessels exempted from excise duty. No CVD on imported ships and

vessels.

Specific excise duty on cigarettes increased by about 18 percent. Similar increase on cigars, cheroots and cigarillos

Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as taxies.

Excise duty on marble increased from 30 per square meter to 60 per square meter.

Proposals to levy 4 percent excise duty on silver manufactured from smelting zinc or lead.

Duty on mobile phones priced at more than 2000 raised to 6 percent.

MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic

systems of medicine to reduce valuation disputes.

SERVICE TAX

Included in the negative list for service tax o Vocational courses offered by institutes affiliated to the State Council of Vocational Training

o Testing activities in relation to agricultural produce

Proposals to levy Service Tax on all air conditioned restaurant.

Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.

For homes and flats with a carpet area of 2,000 sq. ft. or more or of a value of 1 crore or more, which are high-end

constructions, where the component of services is greater, rate of abatement reduced from 75 to 70 percent.

A onetime amnesty scheme called ‘Voluntary Compliance Encouragement Scheme’

o Defaulter may avail of the scheme on condition that he files truthful declaration of Service Tax dues since

1st October 2007.

BUDGET 2013

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GOOD AND SERVICES TAX

A sum of Rs. 9,000 crore towards the first installment of the balance of CST compensation provided in the budget.

Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.

WHAT’S CHEAPER? & WHAT’S COSTLIER?

WHAT’S CHEAPER? WHAT’S COSTLIER? No excise duty for handmade carpets of choir and

jute.

Vocational courses and testing activities in relation

to agriculture to be exempt of service tax.

To reduce abatement rates on luxury apartments.

Lower Securities Transaction Tax on mutual funds

Duty-free Gold limit raised

Excise duty on Cigarette increased by 18%

6% percent duty on mobile phones that cost above

Rs 2000

Eating out to get more expensive. All A/C

restaurants will have to pay service tax.

100% custom duty on luxury cars

4% duty on silver

Duty on set up box to be increased

TDS at 1 per cent on properties being sold for

more than Rs 50 lakh.

CAPITAL MARKET

SECURITIES TRANSACTION TAX (STT)

Securities Transaction Tax (STT) reduced to 0.01% from 0.017% as under:

Sl.No. Nature of taxable securities transaction Payable by Existing Rates

(in per cent)

Proposed Rates

(in per cent)

1 Delivery based purchase of units of an equity

oriented fund entered into in a recognised stock

exchange

Purchaser 0.1 Nil

2 Delivery based sale of units of an equity oriented

fund entered into in a recognized stock exchange

Seller 0.1 0.001

3 Sale of a futures in securities Seller 0.017 0.01

4 Sale of a unit of an equity oriented fund to the

mutual fund

Seller 0.25 0.001

The proposed amendments in the rates of securities transaction tax will be effective from 1st June, 2013 and will

accordingly apply to any transaction made on or after that date.

COMMODITY TRANSACTION TAX (CTT)

Introduction of CTT (Commodities Transaction Tax) 0.01%

Commodity Transaction Tax (CTT) levy on non agricultural contracts. Agricultural commodities will be exempted.

BUDGET 2013

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BUDGET INTERPRETATIONS

Sectorial impact Effect on Capital Market

Automotive

Increased duties on high end vehicles Carmakers

Excise Duty on SUV's raised Tata Motors, M&M

Jawaharlal Nehru National Urban Renewal Mission (JNNURM) allocated

Rs14873 crore

Ashok Leyland,

Tata Motors

Completion of 1,200 kms of electrification and gauge conversion of 450 kms

from narrow gauge to broad gauge

Hind Rectifiers

Banking and financial services

Securities Transaction Tax (STT) reduced

IIFL, Motilal Oswal,

Religare

Power sector - tax holiday extended to 31 March 2015

Bank correspondents can sell micro finance products

SKS Micro

Consumer Durables/ Non-Durables

30% increase in plan expense

Infra, consumers

Engineering and capital goods

3000 kms of road awards

L&T, IRB, IVRCL

Higher allocation for wind energy

Suzlon Energy

Regulatory authority for road sector

IRB Infra

Higher allocation for water treatment

Triveni Engineering

Retail and real estate

1% TDS on real estate transaction revived

Rate of abatement on high cost reduced

DLF

Tobacco

Excise Duty on cigarettes up 18%

ITC

Defence

Higher allocation to defence

BEML, M&M

BUDGET 2013

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