BUDGET 2013

INDIVIDUALS

INDIVIDUALS

Permissible premium rate increased from 10 percent to 15 percent 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, eligible for section 80d of the income tax act

Donations made to national children fund eligible for 100 percent deduction

Tax deduction at source (TDS) is being extended from 1 June 2013 on sale
of immovable properties for a consideration exceeding Rs.50 lakh. The
buyer would have to deduct 1% of the price at the time of payment or entry
in his books, whichever is earlier, pay the tax to the government, obtain a tax
deduction account number, file a TDS return and issue a TDS certificate

SALARY CLASS








General Rates of Tax
Normal Rates of
Tax (Men resident
in India & below
60 years of age)
Rates of tax for a
woman, resident
in India & below
60 years of age

Upto Rs. 2,00,000 Nil Nil
Rs. 2,00,001 to Rs. 5,00,000 10 % 10 %
Rs. 5,00,001 to Rs. 10,00,000 Rs.30000 + 20% Rs.30000 + 20%
Above Rs. 10,00,000 Rs.130000 + 30% Rs.130000 + 30%
Surcharge@10% on tax payable is introduced for total income above
Rs.1 crore
No change in cess rate, which remains @ 3%

Rates of tax for an individual, resident in India and of the age of 60-
80 years of age







Rates of tax for an individual, resident in India and of the age of 60-
80 years of age

Every Individual resident in India,
who is of the age 60-80 years
Upto Rs. 2,50,000 Nil
Rs. 2,50,001 to Rs. 5,00,000 10 %
Rs. 5,00,001 to Rs. 10,00,000 Rs.25000 + 20%
Above Rs. 10,00,000 Rs.125000 + 30%
Every Individual resident in India,
who is of the age 80 years or more
Upto Rs. 5,00,000 Nil
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%
Section 87A - Rebate of Rs.2000
Section 80EE - Housing Loan for First Time
Buyers
Introduction of new
sections
Section 80CCG - Rajiv Gandhi Equity
Savings Scheme
Section 80D - CGHS extended to similar
schemes
Amendments
HOUSE PROPERTY
HOUSE PROPERTY / HOUSING
LOAN
Tax benefit on home loan

Two main components:
Repayment of principal amount
Repayment of interest on home loan
SECTION 80C TAX BENEFIT ON HOME
LOAN (PRINCIPAL AMOUNT)
Maximum deduction allowed is Rs.1,00,000
Deduction is available on payment basis (irrespective of the year for which
payment is made)
Stamp duty and registration fees also allowed as deductions
Applicable only after construction is complete.
Change in service tax for under construction( no service tax for completed
buildings)
In case the property is transferred within 5 years , then no deductions is given
under this section

SEC 24 TAX BENEFIT ON INTEREST ON HOME
LOAN
Income from house property shall be reduced by the amount
paid as interest
Maximum deduction allowed is Rs1,50,000
If not self occupied then entire amount as deduction, no limit
Deduction is on accrual basis



SEC 80EE INCOME TAX BENEFIT ON
INTEREST ON HOME LOAN ( FIRST TIME
BUYERS)
Additional tax deduction of Rs1,00,000 provided that;

Loan is sanctioned between 1
st
April 2013 to 31
st
march 2014
The amount of loan sanctioned doesnt exceed Rs. 25,00,000
Value of residential house property doesnt exceed Rs. 40,00,000
The assesse doesnt own any house property on the date of sanction of loan

INVESTORS
FOREIGN INVESTORS
Simplified the registration i.e KYC norms.

Investments in corporate bonds & government securities can be used as
collateral to meet margin requirements.

Infrastructure debt funds (IDF):
5% TAX concession on interest received by NRI where IDF was set up as
NBFCs.
AMENDMENT:
5% TAX concession on interest received by NRI where IDF was set up as
MUTUAL FUNDS.



RGESS investment increased:
Investors with GTI of upto RS 12 lakhs can invest in RGESS up from
earlier income limit of RS 10 lakhs.
Now investors can invest and claim the benefit for 3 years as against
earlier only for 1 year.

REDUCED STT ON MUTUAL FUND REDEMPTION:
At counters: from 0.25% to 0.001%.
Sold on exchange: from 0.1% to 0.001%.

Increased ddt on mutual funds from 5% to 10%.





SMEs AND STARTUPS:
SMEs including startups can now list at two SME exchanges in the
country.
SMEs can raise funds only through INSTITUTIONAL PLACEMENTS
providing liquidity to the exchanges.

TECH INCUBATORS:
Funds given by the companies to support tech incubators within
academic institutions will qualify as corporate social responsibility
(CSR) expenditure.

Companies investing RS100 crore or more in plant & machinery are
entitled to deduct an investment allowance of 15% of total investment.

SHOCKS OF THE BUDGET
Tax payers

10 % surcharge whose taxable income is above
1crore per year

No change in the tax slabs



VIEWS OF AAM ADMI
Noida-based school teacher Maria Amin is among the
1.8 crore taxpayers who will get a tax credit of Rs 2,000 next year,
reducing her tax liability by almost 30%.

But she feels that in absolute terms the benefit is so pitifully small that it
won't make a difference. "It will reduce my tax by barely Rs 172 per
month, provided my income does not go beyond Rs 5 lakh in the
coming year," she says derisively.


Chandigarh, retired PSU manager Prahlad Kumar Wahi

Despite an 8.5% rise in inflation in the past 12 months, there is no
change in the exemption limit. "The budget should have at least done
something for senior citizens who have a fixed income but growing
expenses

(Last year's budget had raised the basic exemption for senior citizens
by Rs 10,000 to Rs 2.5 lakh and given all taxpayers an additional
exemption of Rs 10,000 for savings bank interest.)




OTHER SHOCKS
Dividend distribution tax on debt oriented MF
increased from 12.5 to 25 % for individuals and
hufs
Surcharge on dividend distribution tax from 5 to 10
% .
CONCLUSION
TAX STRUCTURE IN INDIA

1) What are u doing?
Ans. : Business Tax : PAY: PROFESSIONAL TAX!

2) What are u doing in Business
Ans. : Selling the Goods. Tax : PAY SALES TAX!!

3) From where are u getting Goods?
Ans. : From other Area/State/Abroad Tax : PAY CENTRAL SALES TAX, CUSTOM DUTY
& OCTROI! AND NOW LBT & LPT.

4) What r u getting in Selling Goods?
Ans. : Profit Tax : PAY INCOME TAX! How do you distribute profit ? Ans : By way of
dividend Tax : Pay DIVIDEND DISTRIBUTION TAX.

5) Where u Manufacturing the Goods?
Ans. : Factory Tax : PAY EXCISE DUTY!

6) Doing business in Millions? Ans. : Yes Tax : PAY TURNOVER TAX!
Ans : No Tax : Then pay Minimum Alternate Tax (MAT).

7) Are u taking out over 25,000 Cash from Bank?
Ans. : Yes, for Salary. Tax : PAY CASH HANDLING TAX!