india budget snapshot 2013-14_new

7/28/2019 INDIA Budget Snapshot 2013-14_new

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BUDGET 2013-14

India Snapshot


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DIRECT TAX AT A GLANCE

Individual Taxation Introduction of surcharge for only 1 year @

10% on a person (other than a company)

having total income in excess of Rs 1 crore

Introduction of rebate of Rs 2,000 toindividual tax payers falling in the tax

bracket of Rs 2,00,000 to Rs 5,00,000

Additional interest deduction of Rs 1,00,000on housing loan upto Rs 25 lacs taken by

first-home buyers during the year 1 April

2013 to 31 March 2014. The value of such

house should not exceed Rs 40 lacs.

Extending the benefit of deduction undersection 80D to subscribers of other health

schemes as may be notified by the Central

Government

The benefit of deduction under section80CCG has been extended to investments

made in listed units of equity oriented fund.

Further, the period for which the deduction

will be available has been increased tothree years from the existing one-time

deduction and for investors whose gross

total income does not exceed Rs 12 lacs ascompared to existing Rs 10 lacs

Corporate Taxation Surcharge on domestic companies having

total income in excess of Rs 10 crore has

been increased to 10% from the existing 5%

for one year Surcharge on foreign companies having

total income in excess of Rs 10 crore has

been increased to 5% from the existing 2%

for one year

Corporate Taxation Concessional rate of tax @15%

applicable to dividends received from

foreign subsidiaries has been extended

to one more year Removal of cascading effect of DDT in

case of a domestic company receiving

dividend from its foreign subsidiaries,

if the former declares dividend in the

same year in which it receives the

dividend from the latter (w.e.f 1 June

2013)

Manufacturing companies will now beeligible for an investment allowance @

15% for 2 years (for 2nd

year on net of

allowance claimed in 1st year) oninvestment of more than Rs 100 crorein new plant or machinery during theperiod from 1 April 2013 to 31 March2015

Budget 2013 SnapshotPage 2


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International tax The rate for TDS on payments in the nature of

Royalty/ Fees for technical services to

non-residents has been increased from10% to 25%

The Bill has clarified that submission of TRC is

a necessary condition and not a sufficient

conditions for availing benefits of DTAA

Widening of tax base In case of buy-back of shares by unlisted

companies, an additional income-tax @

20% on the distributed income(consideration paid in excess of the sum

received by the company at the time of

issue of such shares) (w.e.f. 1 June 2013)

shall be payable

Income arising from the said buy-back ofshares of unlisted company where the

company is liable to pay additional tax,will be exempt in the hands ofshareholders

Others Introduction of commodities transaction

tax @ 0.01% on commodity derivativesother than agricultural commodities

Reduction in rates of Securitiestransaction tax

For transfer of asset (other than capitalasset) being land and building held as

stock-in-trade, it is proposed to insert

new section 43CA for considering stamp

duty value as deemed value of

consideration, in case actualconsideration is lower than the stamp

duty value

Others New section 194-IA is proposed to be inserted

providing for TDS @ 1% by a transferee on

the sales consideration for transfer of

immovable property (w.e.f. 1 June 2013),

if the sales consideration is exceeding Rs

50 lacs Modified provisions of GAAR will come into

effect from 1 April 2016 Return of income filed without payment

of self-assessment tax will be treated as

defective return (w.e.f. 1 June 2013)

Rules on Safe Harbour for number ofsectors will be issued after examining

reports of the Rangachary Committee

Benefit of tax pass through status (i.e.income is taxable in the hands of

investors instead of Venture Capital Fund

/ Venture Capital Undertaking) has been

provided to Category I Alternative

Investment Fund

New sections 14A and 14B is proposed tobe inserted in WT Act to enable e-filing

of Wealth tax return (w.e.f. 1 June 2013)



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INDIRECT TAX AT A GLANCE

Service Tax Service tax rate remains unchanged Scope of negative list proposed to be enlarged

to cover:

Vocational courses offered by institutions ofthe State Council of Vocational Training

Testing activities in relation toproduction of agricultural produce

Exemption on copyright on cinematographicfilms restricted to films exhibited in cinema

halls (Effective 1 April 2013)

All air-conditioned restaurants to chargeservice tax. Condition of Liquor license done

away with. (effective 1 April 2013)

Abatement in respect of Services involvingConstruction of a complex/building/civil

structure intended for sale except where

entire consideration is received after

Issuance of completion certificate reduced

from 75% to 70% except for residential units

having carpet area upto 2000 square feet or

where the amount charged is less thanRs 1,00,00,000 (One Crore ) (with effect from

1 March 2013). Effectively, the rate of Service

Tax has increased from 3.09% to 3.708%

Exemption limit for charitable organizationsproviding service of general public utility

reduced from 25 lakhs to 10 lakhs (with effect

from 1 April 2013)

Service Tax Following service tax exemptions havebeen

withdrawn (effective 1 April 2013):Renting of immovable property

byeducational institutions Parking of Vehicle for general public

Repair or maintenance or aircraftServices to Government, local/ Govt.

authority Transportation of Household effects,

Petroleum and Petroleum Products and

Postal Mail/Mail Bags by rail or vessel

within India

Exemption on Goods Transport AgencyServices extended to all agricultural

produce, specified food stuff (excludingalcoholic beverages), chemical fertilizersand oil cakes



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INDIRECT TAX AT A GLANCEService Tax Advance Ruling provisions extended

to Resident Public Limited companies.

Maximum penalty on non registration underservice tax restricted to Rs 10,000.

Service tax amnesty schemeintroduced. Interest and penalty waived

on filing of truthful declaration of

service tax dues since 1 October 2007.

Central Excise Peak Rate of excise duty remains

unchanged

Exemptions from Central Excise Duty on: Cotton at fibre stage

Ships and vessels withcorresponding benefit of CVD on

imports for ship building industry

Excise duty increased on SUVs (1500 CC and above) from 27% to

30%

Mobile phones valuing morethan Rs 2,000 from 1% to 6%.

Cigarettes by 18%; similar increase oncigars, cheroots and cigarillos

Marble slabs and tiles from Rs 30 toRs 60 per square metre

Excise duty to be imposed on silverrecovered during smelting of Zinc or Lead

Excise duty on MRP of Branded medicines ofAyurveda, Unani, Siddha, Homeopathy andbio-chemic.

Central Excise Advance Ruling provisions extended: To Resident Public Limited Companies;

For manufacture/processing ofnew products

Admissibility of credit of tax on Inputservices

Customs Peak Rate of customs duty remains unchanged Baggage Rules amended to raise duty free

import of Jewellery for Indian male passenger

from Rs 10,000 to Rs 50,000 for Indian female

passengers from Rs 20,000 to

Rs 1,00,000.

Period of import duty concession in respectof specified parts of electric and hybrid

vehicles extended upto 2015.

Customs duty increased in respect of: High-end luxury cars

Motor cycles exceeding 800 CC

Set top boxes

Raw silk

Steam Coal

Customs duty reduced in respect of certaingoods like

Specified agricultural goods

Pre-forms of precious and semi-preciousstones

Bituminous coal

Specified machinery used in leatherand footwear industry

Textile machinery and parts



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CustomsCustoms Export duties imposed on certain specified

metals and withdrawn on specified agro-

products Certain concessions extended to Aircraft

Maintenance, Repair and Overhaul industry

Powers given to Tribunals to extend stayorders beyond 180 days on an application

filed by assessee. However, total period of

stay restricted to 365 days.

Time limit of 30 days for storage ofimported goods pending clearance

Penal provisions includingimprisonment provisions made stringent

Goods & Services Tax Draft GST constitutional amendment bill and

GST law at advanced discussion stage

Rs 9,000 crores provided towardsfirst instalment of CST compensation



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india budget snapshot 2013-14_new

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