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New Delhi:
Finance Minister P. Chidambaram Thursday proposed a tax cut of
Rs.2,000 for people earning an annual income of between Rs.200,000
and Rs.500,000 and said anything beyond that was not possible
given the current circumstances.
Presenting the national budget for 2013-14, the finance minister
said any hike in the exemption limit for direct tax that is paid
by individuals would take millions out of the tax net and was
neither a desirable proposition, nor feasible.
Accordingly, he proposed a Rs.2,000 tax credit for those in the
first slab.
"This measure will benefit 1.8 crore (18 million) tax payers," he
said, adding that this would entail an outgo of Rs.3,600 crore
($650 million) to the exchequer.
Chidambaram said the tax-GDP ratio in the country had slipped to
5.5 percent for direct taxes and 4.4 percent for indirect taxes.
"Our tax-GDP ratio is one of the lowest in the world. We should
reclaim 11.9 percent tax-GDP ratio in the short term."
For the affluent, the finance minister took the cue from what was
proposed as the "super rich tax" by Wipro chairman Azim Premji,
and said a surcharge of 10 percent was proposed on the those
earning more than Rs.1 crore per annum.
"This surcharge will be for one year," the finance minister said,
adding there were some 42,800 people who fell in that bracket. "I
am sure, there is a little bit of Azim Premji in everyone and this
additional burden will be for one year."
Budget Higlights
Modified law on GST to be tabled
during budget session
Import duty on high-end vehicles raised from 75 percent to 100
percent
Concessions for encouraging MRO (maintenance repair overhaul)
sector
Excise duty on cigarettes to be increased 18 percent
No change in customs duty on non-agricultural products
No change in service tax of 12 percent
Modified law to prevent tax avoidance to come into effect April 1,
2016
100 percent tax deduction for contributions to National Children's
Fund
Education cess to continue at 3 percent
11 lakh people have benefited from direct cash transfers; scheme
to be rolled out across the country during UPA-2 term (May 2014)
Property transactions skewered; TDS of one percent where
transaction exceeds Rs.50 lakh
Tax on mutual fund redemptions reduced from .25 percent to .001
percent
No revision of personal income tax slabs; relief in first bracket
through tax credit of Rs.2,000 for earnings up to Rs.5 lakh
Ten percent surcharge on income exceeding Rs.1 crore a year; only
42,800 people have declared such income
Tax Administrative Reforms Commission to be set up
Collective responsibility to ensure dignity and safety of women;
recent incidents have cast a dark shadow; stand in solidarity with
our girl children and women; will keep them safe and secure
Rs.1,000 crore allocated for establishing Nirbhaya Fund
Defence allocated Rs.2 lakh 3,672 crore
Cities to be encouraged to promote waste to energy projects
Low interest funds to be provided for promoting clean energy
Rs.800 crore provided to promoting wind energy
Two new ports to be set up in West Bengal and Andhra Pradesh to
add 100 million tonnes handling capacity
Gas handling terminal at Dabhol in Maharashtra to be fully
operational during 2013-14
State governments urged to sign restructuring plans with
electricity discoms
Tax-free infrastructure bonds of Rs.50,000 crore to be issued
Textile ministry allocated Rs.50 crore for establishing apparel
parks
Handloom sector allocated Rs.96 crore to benefit 150,000 weavers
Infrastructure debt funds to be encouraged
Regulator to be appointed for road projects; 3,000 km of road
projects to be awarded in first six months of 2013-14
Incentive allowance of 15 percent over and above permitted
depreciation to those investing over Rs.100 crore in
infrastructure projects
Rajiv Gandhi Equity Scheme to be liberalised
Seven new cities identified along Delhi-Mumbai Industrial Corridor
Preliminary work begun on Bangalore-Mumbai Industrial corridor
Foodgrain production during 2013-13 estimated at 250 million
tonnes
Rs.500 crore allocated for promoting crop diversification
Rs.200 crore allocated for promoting nutrient-rich crops
Rs.50 crore allocated for farmer-producer organisations
National Livestock Mission to be launched with allocation of
Rs.307 crore
Hope parliament will pass food security bill; Rs.10,000 crore
allocated for initial expenditure on implementation
Human resource development ministry to get Rs.65,867 crore
Rs.13,250 crore allocated for midday meals scheme
Rs.17,700 crore allocated for Integrated Child Development Scheme
Drinking water and sanitation ministry allocated Rs.15,260 crore
Allocation of rural development ministry allocation raised by 46
percent to Rs.80,294 crore; Rs.33,000 crore for rural jobs scheme
Budget expenditure for 2013-14 at Rs.16 lakh 65,297 crore; plan
expenditure at Rs.5 lakh 55,224 crore
Rs.41,000 crore for Scheduled Caste plan
Rs.97,000 crore for women's development
Rs.110 crore for department of disabilities
Rs.37,330 crore for health ministry
Average growth during UPA-1 was 8 percent; high growth not a
novelty
Current account deficit a worry because of high oil and gold
imports
Will need $75 billion to finance current account deficit
Need to encourage FDI in consonance with economic priorities
WPI inflation down to 7 percent; food inflation worrying.
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2013
Union Budget
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