BUDGET 2013

INDIVIDUALS

INDIVIDUAL’S

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 TaxNormal 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 NilRs. 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 NilRs. 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 NilRs. 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 1st April 2013 to 31st march 2014

• The amount of loan sanctioned doesn’t exceed Rs. 25,00,000

• Value of residential house property doesn’t exceed Rs. 40,00,000

• The assesse doesn’t 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! ☑