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LOGO
16 March 2013
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No change in exemption limit or slab rate
No change proposed in the present slab or tax
rates which is currently as under:
Tax Rate Current Slabs Rs.
Nil Upto 200,000*
10% 200,001
500,00020% 500,001 1,000,000
30% Above 1,000,000
Basic exemption limit for senior citizens and very senior
citizens is Rs. 250,000 and Rs. 500,000 respectively
Impact on Personal finance--NEUTRAL
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Rebate up to Rs. 2,000from tax payableavailable to residentindividuals whose totalincome does not exceedRs. 5 lakhs.
Impact on Personalfinance--POSITIVE
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Tax Rebate Rs.2000 upto Rs.5 lac income
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Surcharge proposed atthe rate of 10% if incomeexceeds Rs. 100 lakhs or
Rs.1 crore.
Impact on Personal
finance of super rich--N E G A T I V E
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Surcharge on super rich
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Super Rich Person-How many are there as on
date ? According to FM, the
number is 42,800
KPMGInternationalreported-1,25,000 High Networth
Indians [with investiblewealth of $1 million(Rs.5.5 crore) plus houseand durables] .
with the luxury carmarket touching some27,000 cars a year, thenumber of super richcannot be as low as 42,800
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Impetus to first-time home buyers
Additional deduction of Rs. 1
lakh(over and above theexisting Rs. 1.5 lakhs) oninterest on housing loan
Housing loan should notexceed Rs. 25 lakhs and
valueof property notexceeding Rs. 40lakhs
Only for loans sanctionedduring FY2013-14
Can be carried forward to
next year if not fully utilized Impact on Personal
finance--POSITIVE
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Rajeev Gandhi Equity Savings Scheme liberalised
Deduction presently
available to new retailinvestors for investment inequity share
extended to includeinvestment in equityoriented mutual fund
Eligible limit of gross totalincome of the investor forthis purpose is proposed tobe enhanced from Rs. 10lakhs to Rs. 12 lakhs
Deduction available for threeconsecutive years
Impact on Personalfinance--POSITIVE
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TDS on Transfer of immovable property
Consideration for
transfer of any
immovable propertyof Rs. 50 lakhs and
above attractswithholding tax i.e.
TDS @ 1% -
Applicable from 1
June 2013Impact on Personal
finance--NEGATIVE
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Sale of house-tax on higher value
Sale consideration on the
transfer of immovableproperty when held asstock in trade
to be the higher of the
stamp duty value or theactual consideration incomputation of businessprofit
Impact on Personalfinance--NEGATIVE
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Purchase of an Immovable Property for inadequate
consideration-consequences
Purchase of immovable
property by individual orHUFfor inadequate
consideration(Consideration minus
Stamp duty value > Rs.50,000)
taxable in the hands ofthe BUYER as GIFT TONON RELATIVES
Impact on Personalfinance--NEGATIVE
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Increase in surcharge for
corporates
Particulars Below Rs.1 crore Above Rs.1 crore
up toRs.10 crores
Above Rs.10 crores
SurchargeRate
EffectiveTax rate
SurchargeRate
Effectivetax rate
SurchargeRate
Effectivetax rate
Domestic Nil(Nil)
30.90%(30.90%)
5%(5%)
32.45%(32.45
%)
10%(5%)
33.99%(32.45%)
Foreign Nil(Nil)
41.20%(41.20%)
2%(2%)
42.02%(42.02
%)
5%(2%)
43.26%(42.02%)
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Note:
Figures in bracket refers to the current rates
Education cess of 3% has been considered for determining the
effective tax rates
Impact on CORPORATE finance--NEGATIVE
I i f i i ifi d
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Incentive for investment in specifiedplant or machinery
Applicable to a Companyengaged in the manufacture ofarticle or thing and whichinvests more than Rs. 100crores in specified plant ormachinery.
Investment to be donebetween1 April 2013 to 31
March 2015. Deduction of 15% on actual cost
of plant or machinery acquiredand installed
Assets to be held for a period of5years, failing which deduction
availed shall be treated asincome Impact on CORPORATE
finance--POSITIVE
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E i f l f
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Extension of sunset clause for powersector
Sunset date for the
power sector tocommence eligibleactivity extended from
31 March 2013 to 31March 2014
Impact on
CORPORATE finance-
-POSITIVE
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Additional tax on Buyback of shares
Additional tax of 20% on distributed income in the
course of buyback of shares by unlistedcompanies, payable by such company
Distributed income is the consideration for
buyback less issue price of the sharesBuyback consideration exempt in the hands of the
shareholder
Impact on CORPORATE finance--NEGATIVE
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D d ti f l t f
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Deduction for employment of newworkmen
Presently, deduction
available for additionalwages paid to newregular workmenemployed inmanufacturing or
production activities Amendment proposed
to restrict the deductiononly in respect ofworkmen employed in
manufacturing activitiescarried out in a factoryImpact on all industries
finance--NEGATIVE
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C i l t f ithh ldi t
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Concessional rate of withholding taxon interest
Interest income for a
non-residentfrom the rupee
denominated long-terminfrastructure bonds of
an Indian company eligible for lower rate of
withholding tax @ 5% -
Applicable from 1 June
2013Impact on Non-
residents finance--POSITIVE
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Rate of tax on royalty and feesfor technical services payable to An NRI
non-residentRate of withholding on
royalty and fees fortechnical servicespayable to a non-resident increased from
10% to 25% Lower rate as per taxtreaty can be availed,subject to tax residencycertificate
Impact on Non-residents finance--NEGATIVE
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Di id d f ifi d f i
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Dividends from specified foreigncompany
Beneficial tax rate of
15% on dividendincome from specifiedforeign company
extended by 1 year till
31 March 2014
Impact on Corporate
finance--POSITIVE
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Tax Proposals
Commodities transactiontax -Introduced at the rateof 0.01% on commodityderivatives (exceptagricultural commodities)
Securities transaction tax Existing rates on taxablesecurities transactions
reduced
Impact on Finance for all
Impact on finance-Negative
Impact on Finance-POSITIVE
Other Taxation Proposals
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Tax Proposals All restaurants having air-
conditioning or central air-heating facility liable to servicetax
Service tax exemption on thefollowing have been withdrawn:
1. Vehicle parking to generalpublic
2. Aircraft repair or maintenanceservices provided togovernment, a local authorityor governmental authority
3. Renting of immovable propertyand auxiliary education services
provided by educationalinstitution
4. Charities for advancement ofany other object of generalpublic utility
Impact on finance for all
All service taxproposals are
having only
NEGATIVE IMPACT
Service tax proposals
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What the Budget provided?
no high profile announcements or
big recovery plans outlined
commitment shown towards the fiscalconsolidation plan
Planned expenditure has increased by almost 30%from the last year
to target fiscal deficit of 4.8% in 2013-14
Fiscal deficit for 2012-13 has been limited to 5.2%
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Backdrop of Budget
challenging macroeconomic environment
lowest GDP growth in a decade. 5.5% in last
quarter.
a depressed global economic outlook
prevalence of domestic policy bottlenecks High fiscal deficit
expansionary subsidies and
worsening current account balance. Resulted in the slowdown.
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LOGO
CA.K.HariharanPartner
M/s.Suri & Co
Chartered Accountants, Coimbatore
98-940-41901
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]