Highlights of Direct & Indirect Taxes under Click to edit Master subtitle style Union Budget - 2013

Prepared by Reeta Dangar Dimple Rajvir Harsha Satramani Parin Karia Harshvardhan Rana

3/29/13

3/29/13

INTRODUCTION

We will show here what kind of impact on income tax rates the Budget 2013 presented by Finance Minister P. Chidambaram had on you. However, we stress that consistency in investment with prudent asset allocation and regular review is crucial in achieving long term financial security irrespective of what tack budgets take.

3/29/13

Tax Slabs for the current year Click to edit Master subtitle style

3/29/13

Assessee

Basic exemption and Income Slabs Total Income Tax Rate

All Individuals, HUF, AOP and BOI (except those stated below)

Nil 10% of income above Rs.2,00,000/Rs.5,00,001/- to Rs.10,00,000/- Rs.30,000/- plus 20% of income above Rs.5,00,000/Above Rs.10,00,000/Rs.1,30,000/- plus 30% of income above Rs.10,00,000/-

upto Rs.2,00,000/Rs.2,00,001/- to Rs.5,00,000/-

Individuals, being resident, upto Rs.2,50,000/Nil Rs.2,50,001/- to Rs.5,00,000/10% of income above and Senior Citizen (i.e. Rs.2,50,000/above 60 years) upto the Rs.5,00,001/- to Rs.10,00,000/- Rs.25,000/- plus 20% of income age of 80 years above Rs.5,00,000/Above Rs.10,00,000/Rs.1,25,000/- plus 30% of income above Rs.10,00,000/-

Individuals, being resident, upto Rs.5,00,000/and Very Senior Citizen i.e. Rs.5,00,001/- to Rs.10,00,000/of age 80 years and above Above Rs.10,00,000/-

Nil 20% of income above Rs.5,00,000/Rs.1,00,000/- plus 30% of income above Rs.10,00,000/-

3/29/13

Types of Taxes

3/29/13

Direct Tax

A direct tax is a kind of charge, which is imposed directly on the taxpayer and paid directly to the government by the persons (juristic or natural) on whom it is imposed. It is on that cannot be shifted by the taxpayer to someone else.

3/29/13

For example,

Income tax Corporation Tax Property tax Inheritance (Estate) Tax Gift tax etc

3/29/13

Direct Tax At a Glance (Budget)

No change in income tax slabs A tax credit of Rs. 2,000 to every person with an income of up to Rs. 5 lakh per annum Surcharge of 10 % on persons (other than companies) whose taxable income exceeds Rs. 1 crore for only one year Increase in surcharge from 5 % to 10 % on domestic companies whose taxable income exceeds Rs. 10 crore 3/29/13

3/29/13

Permissible premium rate increased from 10 % to 15 % of the sum assured by relaxing eligibility conditions of life insurance policies for persons suffering from disability and certain ailments. Contributions made to schemes of Central and State Governments similar to Central Government Health Scheme will be eligible for deduction under section

Direct Tax At a Glance

Concessional tax of 15 % to be continued for one more year on dividend received by an Indian company from its foreign subsidiary Securitization Trust to be exempted from Income Tax, however tax to be levied at specified rates only at the time of distribution of income for companies, individual or HUF etc. No further tax on income received by investors from the Trust. 3/29/13

Direct Tax At a Glance

Securities Transaction Tax brought down to 0.01 % from 0.017 % Commodity transaction tax of 0.01 per cent introduced on non-agri futures traded oncommodity market Modified provisions of GAAR will come into effect from 1.4.2016.

3/29/13

3/29/13

Indirect Taxes

3/29/13

Indirect taxes are those whose burden can be shifted to others so that those who pay these taxes to the government do not bear the whole burden but pass it on wholly or partly to others. Indirect taxes are levied on production and sale of commodities and services and small or a large part of the burden of indirect taxes are passed on to the consumers.

For example,

Excise duties on the product of commodities Sales tax Service tax Customs duty Tax on rail / bus fare etc

3/29/13

Indirect Tax At a Glance (Budget)

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 % for nonagricultural products

3/29/13

Customs Duty
Reduction in duty on specified machinery for manufacture of leather and leather goods including footwear from 7.5 % to 5 % Reduction in duty on pre-forms precious and semi-precious stones from 10% to 2 % Export duty on de-oiled rice bran oil cake withdrawn New duty imposed on export of unprocessed ilmenite @ 10 % 3/29/13

Customs Duty
Duties on Steam Coal and Bituminous Coal equalized. Custom duty @ 2% and CVD @ 2 % levied on both kinds coal Increase in duty on imported luxury motor vehicles from 75 % to 100 % Increase in duty on imported motorcycles with engine capacity of 800cc or more from 60 % to 75 % Increase in duty on imported yachts and similar vessels from 10 % to 25 3/29/13

Excise duty

Relief for readymade garment industry. In case of cotton there will Zero % excise duty at fiber stage. In case of spun yarn made of manmade fiber, duty of 12 % at the fiber stage.

Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty 3/29/13

Excise duty

Excise duty on marble increased from Rs. 30 per square meter to Rs. 60 per square meter New duty imposed @ 4 % on silver manufactured from smelting zinc or lead Increase in duty from 1 % to 6 % on mobile phones priced at more than Rs. 2000 MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic systems of medicine to reduce valuation disputes. There will be an abatement of 35 percent

3/29/13

Service Tax

Maintain stability in tax regime. Vocational courses offered by institutes affiliated to the State Council of Vocational Training and testing activities in relation to agricultural produce included in the negative list for service tax Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls. Service Tax to be levied on all air conditioned restaurants

3/29/13

Service Tax

For homes and flats with

carpet area of 2,000 sq.ft. or more or value of Rs. 1 crore or more, which are high-end constructions, where the component of services is greater, rate of abatement reduced from 75 % to 70 %

A onetime scheme called Voluntary Compliance Encouragement Scheme has been proposed to motivate the registered assesses under service tax to file returns and pay tax dues since 1st October 2007 to avoid interest, penalty and other consequences
3/29/13

Sums

3/29/13

3/29/13