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Union Budget Review 2013-2014

Finance Minister P.Chidambaram presented Union budget 2013-2014 on 28

Budget expenditure for the FY 2013-2014 is Rs.16, 65,267 crore of which Plan
expenditure is Rs.5, 55,322 crore whereas Non-Plan Expenditure is Rs.11, 09,975 crore.
Plan Expenditure in 2013-14 to grow at 29.4%
Personal taxation

The tax rate remains the same for all levels of income as the previous year.
Nil for income up to Rs.200000 in case of earning citizens, Rs.250000 in case of
senior citizens and 500000 in case of very senior citizens.
10% for income between Rs.200000- Rs.500000 in case of earning citizens,
Rs.250000 Rs.500000 in case of senior citizens.
20% for income between Rs.500001 till Rs.1000000 in case of earning citizens,
senior citizens and very senior citizens.
30% for income between Rs.1000001 to Rs.10000000 in case of earning citizens,
senior citizens and very senior citizens.
30% for income above Rs.10000000 for earning citizens, senior citizen and very
senior citizen. An additional 10% surcharge is applicable to this bracket. They are
considered as super rich.
An additional benefit of Rs.2000 for tax payers between Rs.500001 Rs.1000000 in
case of earning citizens and senior citizens and income up to 500000 in case of very
senior citizens.
Education cess remains the same at 3%
Donations made to National Children's Fund will now be 100% deductible.
Business taxation:
Commodities Transaction Tax (CTT) is levied on all non-agricultural products and it
is not to be dealt as speculative transaction. CTT is to be allowed as deduction while
computing business income.
Securities transaction cost has been reduced on various categories of transactions.
State Government undertaking no more have to pay privilege fees, license fees etc. to
State Government.
Amount of deduction for bad debts to be restricted to the amount in excess of the
credit balance in the provision for bad and doubtful debts made under section
36(1)(vii a), without any distinction between rural advances and urban advances.
Corporate Taxation & Tax on distributed profits/dividends:
The cash donations to all political parties and the electoral trusts will not be allowed
as deduction.
Current surcharge increased from 5% to 10% for all domestic companies with taxable
income above Rs.10 crore.
In case of foreign companies, surcharge increased from 2% to 5%, if the taxable
income exceeds Rs.10 crore.
Tax on distributed income to be increased from 12.5% to 25% in all cases where
distribution is made by a fund, other than equity oriented fund, to an individual or a
Non-resident Taxation:
The tax rate on payments by way of royalty and fees for technical services to non-
residents from increased from 10% to 25%.
If the sale consideration exceeds Rs.50lakhs, of immovable property other than
agricultural land, then it is subject to TDS at 1%.
Tax to be deducted at a concessional rate of 5% on interest payable to a non-resident
in case of certain rupee-denominated long-term infrastructure bonds issued by an
Indian company in India.

Custom Duty:

Duty free allowance in respect of jewellery for an Indian passenger who has been
residing abroad for over one year or a person who is transferring his residence to India
raised from Rs.10,000 to Rs.50,000 in case of a gentleman passenger and from
Rs.20,000 to Rs.1,00,000 in case of a lady passenger.
Rise in Duty free allowance from Rs.600 to Rs.1500 for crew member of
Customs house agents to be called customs brokers.
The minimum amount of refund of customs duty will be Rs.100.
The minimum amount demanded for issuance of show notice should be Rs.100.
Interest free period for payment of import duty to be reduced from five days to two
Import/export general manifest to be filed electronically except for certain cases
where it is not feasible.
CBEC to be empowered to permit the landing of vessels and aircrafts at any place
other than customs port or customs airport.
The period of storage of imported goods, in a public or private warehouse pending
clearance to be reduced to thirty days. However the period of storage may be not
exceeding thirty days at a time.
The threshold limit for punishment in an offence relating to evasion of duty or
fraudulent connection with export of goods, to be increased from Rs.30 lakh to Rs.50
For protection of designs and geographical indications importation or exportation of
goods to be prohibited.
Provisional attachment of property may be ordered in case of non-payment of duty on
account of fraud, suppression of facts etc. as well.
Provisions relating to duty deferment to be omitted.
No duty to be charged on any sample of goods which is consumed or destroyed during
the course of testing or examination.
Basic customs duty on the following goods to be enhanced:-
Yachts and motor vehicles
Raw silk
Set top boxes
Luxury cars (duty enhanced from 75% to 100%)
Central excise duty
Speed post with proof of delivery or courier approved by the Central Board of Excise
& Customs would also be the prescribed modes of delivery for any decision or order
or any summons or notices.
Advance ruling may on the matters relating to credit of service tax paid or deemed to
have been paid on input services.
Offences relating to excisable goods, exceeding duty liability of Rs.50 lakh are
punishable for evasion of payment of any duty relating to credit of any duty to be
cognizable and non-bail able.
An offence involving evasion to be punishable with a term of imprisonment extending
to seven years with fine in case the duty leviable exceeds Rs.50 lakh.
Resident public limited companies to be eligible for seeking advance ruling on
central excise and service tax matters as is available under Customs.
Money due to the Government may now be recovered from any person other than
from whom money is due after giving a proper notice, if that other person holds
money for or on account of the first person.
Recovery provisions provided under rule 14 of the CENVAT Credit Rules, 2004 to
apply in case of failure to pay the amount on removal of inputs/capital goods as such,
after use and writing off the value of the inputs/capital goods.
Service of a statement containing details of duty not paid, short levied or erroneously
refunded to be deemed to be a show cause notice.
The officer-in-charge of police station to admit the arrested person to bail to appear
before the Magistrate or in default of bail forward him in custody of Magistrate only
where the offence is non-cognizable.
Interest on refund arising out of finalization of provisional assessment to be paid as
per the provisions of Section 11BB.
MRP based valuation prescribed with 35% abatement for non-allopathic
Excise duty enhanced on the following goods:-
Mobile phones of retail sale price exceeding Rs.2, 000/-.
Marble tiles and slabs
Full exemption from excise duty on ships and other vessels. So no CVD will be
charged on import of the same.
Zero excise duty route restored in respect of branded readymade garments and made

Service tax
All restaurants with air-conditioning or central air heating (including restaurants not
serving liquor as well) in any part of the establishment at any time during the year to
be liable to service tax.

Transportation of the following items by a Goods Transport Agency would be
o food stuff including flour, tea, coffee, sugar, jaggery, milk products, salt and
edible oil, excluding alcoholic beverages,
o relief materials for specialized purposes,
o chemical fertilizers and oil cakes,
o Registered magazines or newspapers and defence equipments.
The exemptions available in respect of the following services would be withdrawn:
o Transportation of petroleum and petroleum products, postal mails or mail bags
and household effects by railways and vessels.
o Services provided by an educational institution by way of renting of
immovable property or auxiliary educational service. However, such services
when provided to an educational institution would continue to be exempt from
service tax.
o Temporary transfer or permitting the use or enjoyment of a copyright of
cinematograph films for
o Exhibition elsewhere other than in a cinema hall or a cinema theatre.
o Services by way of vehicle parking to general public.
o Services provided to Government, a local authority or a governmental
authority, by way of repair or maintenance of aircraft.
The exemption limit of Rs.25 lakh available to charitable organizations providing
service towards any other object of general public utility would be withdrawn.