Union Budget 2013 Highlights
Honorable Finance Minister Mr. P Chidambaram has presented the Union Budget for 2013. In his budget speech, he unveiled the expenditure for fiscal 2013-14, aiming to fund it with higher revenues, including new taxes on the rich class and large companies.
Here are some highlights from the Finance Bill 2013 related to Direct and Indirect Taxes:
• No revision in tax slabs of Income Tax for individuals.
• A minor tax credit of Rs. 2,000 for those whose income is up to Rs. 5 lakh has been given (Rebate under Sec 87A).
• An additional surcharge will be levied at 10% (other than companies) for those whose income exceeds Rs. 1 crore. Additional surcharges to be in force for only one year.
• The Rajiv Gandhi Equity Saving Scheme is extended to mutual funds also. The income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme is raised to Rs. 12 lakh from Rs. 10 lakh.
• Housing loans up to Rs. 25 lakhs in 2013/14 will be entitled to a deduction of interest up to Rs. One lakh.
• Donations made to the National Children's Fund will now be 100% deductible.
• Increase in surcharge from 5% to 10% on domestic companies whose taxable income exceeds Rs. 10 crore.
• Tax on royalty and fees for technical services to NRIs increased from 10% to 25%.
• In the case of foreign companies who pay a higher rate of corporate tax, the surcharge will increase from 2% to 5% if the taxable income exceeds Rs. 10 crore.
• TDS of one percent on the sale of immovable property over Rs. 50 lakh, not applicable to agricultural land.
• Dividend distribution tax or tax on distributed income, current surcharge increased from 5% to 10%.
• Concessional rate of tax of 15% on dividends received by an Indian company from its foreign subsidiary proposed to continue for one more year.
• A company investing Rs. 100 crore or more in plant and machinery from April 1, 2013, to March 31, 2015, will be allowed a 15% investment deduction allowance apart from depreciation.
• Contributions made to schemes of Central and State Governments similar to the Central Government Health Scheme are eligible for section 80D of the Income Tax Act.
• 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 under section 80C.
• The 'eligible date' for projects in the power sector to avail benefit under Section 80-IA extended from 31.3.2013 to 31.3.2014.
• No change in the basic rates of service tax. Service tax to now apply to all A/C restaurants.
• The scope of the negative list expanded. Vocational courses offered by institutes affiliated with the State Council of Vocational Training and testing activities in relation to agricultural produce are also included in the negative list for service tax.
Service Tax Abatement Rate for Construction Sector Rationalized. For homes and flats with a carpet area of 2,000 sq. ft. or more or of a value of Rs. 1 crore or more, which are high-end constructions where the component of services is greater, the rate of abatement reduced from 75% to 70%.
From India, Ahmadabad
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34Honorable Finance Minister Mr. P Chidambaram has presented the Union Budget for 2013. In his budget speech, he unveiled the expenditure for fiscal 2013-14, aiming to fund it with higher revenues, including new taxes on the rich class and large companies.
Here are some highlights from the Finance Bill 2013 related to Direct and Indirect Taxes:
• No revision in tax slabs of Income Tax for individuals.
• A minor tax credit of Rs. 2,000 for those whose income is up to Rs. 5 lakh has been given (Rebate under Sec 87A).
• An additional surcharge will be levied at 10% (other than companies) for those whose income exceeds Rs. 1 crore. Additional surcharges to be in force for only one year.
• The Rajiv Gandhi Equity Saving Scheme is extended to mutual funds also. The income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme is raised to Rs. 12 lakh from Rs. 10 lakh.
• Housing loans up to Rs. 25 lakhs in 2013/14 will be entitled to a deduction of interest up to Rs. One lakh.
• Donations made to the National Children's Fund will now be 100% deductible.
• Increase in surcharge from 5% to 10% on domestic companies whose taxable income exceeds Rs. 10 crore.
• Tax on royalty and fees for technical services to NRIs increased from 10% to 25%.
• In the case of foreign companies who pay a higher rate of corporate tax, the surcharge will increase from 2% to 5% if the taxable income exceeds Rs. 10 crore.
• TDS of one percent on the sale of immovable property over Rs. 50 lakh, not applicable to agricultural land.
• Dividend distribution tax or tax on distributed income, current surcharge increased from 5% to 10%.
• Concessional rate of tax of 15% on dividends received by an Indian company from its foreign subsidiary proposed to continue for one more year.
• A company investing Rs. 100 crore or more in plant and machinery from April 1, 2013, to March 31, 2015, will be allowed a 15% investment deduction allowance apart from depreciation.
• Contributions made to schemes of Central and State Governments similar to the Central Government Health Scheme are eligible for section 80D of the Income Tax Act.
• 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 under section 80C.
• The 'eligible date' for projects in the power sector to avail benefit under Section 80-IA extended from 31.3.2013 to 31.3.2014.
• No change in the basic rates of service tax. Service tax to now apply to all A/C restaurants.
• The scope of the negative list expanded. Vocational courses offered by institutes affiliated with the State Council of Vocational Training and testing activities in relation to agricultural produce are also included in the negative list for service tax.
Service Tax Abatement Rate for Construction Sector Rationalized. For homes and flats with a carpet area of 2,000 sq. ft. or more or of a value of Rs. 1 crore or more, which are high-end constructions where the component of services is greater, the rate of abatement reduced from 75% to 70%.
From India, Ahmadabad
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I would like to know whether the Rs. 2000 additional income tax rebate under Section 87A for income up to 5 Lakhs is to be given before calculating the surcharge on taxable income or after calculating the surcharge on taxable income.
For example, if my taxable income is Rs. 250,000, the tax on taxable income will be 10%, amounting to Rs. 5000. The surcharge is Rs. 150. Therefore, the total tax on taxable income will be Rs. 5150.
So, will the additional rebate of Rs. 2000 under Section 87A be given on Rs. 5000 or Rs. 5150?
Thank you.
From India, New Delhi
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For example, if my taxable income is Rs. 250,000, the tax on taxable income will be 10%, amounting to Rs. 5000. The surcharge is Rs. 150. Therefore, the total tax on taxable income will be Rs. 5150.
So, will the additional rebate of Rs. 2000 under Section 87A be given on Rs. 5000 or Rs. 5150?
Thank you.
From India, New Delhi
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Budget highlights 2013.pdf