Direct Taxes
- 5% surcharge on domestic companies whose income exceeds Rs 1 crore
- 10 % surcharge on domestic companies whose income exceeds Rs 10 crores
- Surcharge on Dividend Distribution Tax (DDT) increased from 5 % to 10%
- Securities Transaction Tax (STT) rates cut on equity futures to 0.01% and for Mutual Funds to 0.001 %
- Commodities transaction tax (CTT) levied on non-agriculture commodities futures contracts at 0.01%
- Additional Income tax of 20 % for buyback of shares by Unlisted Companies except for buyback of shares on face value
- Tax on Royalty / Fees for technical for services provided abroad increased from 10% to 25 % subject to Double Taxation Avoidance Agreements
- Modified GAAR norms to be introduced from April 1, 2016
- Donations to National Children’s Fund will be eligible for 100% tax deduction
- Long-term infra bonds also eligible for tax deduction
- Direct Tax Bill to be placed soon
Customs Duty
- No change in Peak basic customs duty of 10%
- Leather and goods duty reduced to 5%
- Higher duty on imported vehicles
- Luxury cars import duty at 100%
- Import duty on Yachts duty at 25%
- Import duty on motorcycle at 75%
- Precious, semi-precious duty reduced
- Exempts imported ships and vessels from duty
- Duty cut on leather, leather good machines
- To levy 2% customs, CVD on coal imports
- Higher customs duty on set top boxes from 5 % to 10 %
- Customs duty unchanged for non agri products
- To provide appropriate incentives for semiconductors industry including zero customs duty on plants and machineries.
Excise Duty
- No change in Excise duty of 12%
- No countervailing duty on ships and vessels
- Specific excise duty on cigarettes and cigars raised by 18 per cent
- Excise duty on SUVs to be increased to 30 per cent from 27 per cent, SUVs registered as taxis exempted
- Duty on mobiles above Rs 2,000 raised from 1 to 6 %, based on their maximum retail prices
Service Tax
- No change in Service tax rate of 12%
- One time voluntary compliance scheme for service tax defaulters to be introduced for unpaid service tax since 1-10-07. Interest and penalties to be waived and payment may be made in 1 or 2 installments to tak the 10 lacs assesses who have not filed returns
- Service tax to be levied on all AC restaurants (whether serving liquor or not)
- 2 Services added in Negative List
- Vocational courses affiliated to Institute of Vocational Studies
- Testing for Agriculture products
Personal Taxation (Direct and Indirect)
- No changes in personal Income Tax slabs
- Tax credit of Rs 2000 for income upto Rs 5 lakh
- Additional 10% surcharge would be levied on those whose taxable income is above Rs 1 cr per annum
- TDS of 1% to be levied on transactions above Rs 50 lakhs on transfer or sale of immovable property; agricultural land exempt
- Educational Cess to continue at 3 %
- Additional deduction of interest of Rs. 1 lacs for 1st time Home buyers for loans less than Rs. 25 lacs
- Duty free limit in personal baggage on gold raised to Rs 50,000 in case of male and Rs 100,000 in case of female
- Rajiv Gandhi Equity Savings Scheme (RGESS) will be liberalized & the investor will be allowed to invest in mutual funds. The investor will be able to do this for a period of 3 successive years. The limit for investors wanting to invest in RGESS raised from Rs 10 lakh to Rs 12 lakh.
Goods and Services Tax (GST)
- Draft bill on constitutional amendment and for GST to be placed in 2013
- 9000 crores compensation package for states for foregoing CST
Capital Markets
- SEBI to simplify KYC norms governing foreign investors
- Small and medium companies to be allowed to listed on MSME exchange without making a public offer
- Investor with stake of 10 per cent or less will be treated as FII; any stake more than 10 per cent will be treated as FDI. Committee to be constituted to proposes amendments in the regulations based on the said principle.
- FIIs will be allowed to participate in exchange traded currency derivatives
- Designated Depository Participants free to register different classes of portfolio investors
- Dedicated Debt segment on Stock Exchanges
SME Segment / Start-ups
- In order to encourage SMEs a company investing Rs 100 crore or more in plant and machinery in April 1, 2013 to March 31, 2015 will be allowed 15 % investment deduction allowance apart from depreciation
- SIDBI’s re-financing facility to MSMEs will be doubled to Rs 10,000 crore.
- Small and medium companies to be allowed to listed on MSME exchange without making a public offer
- Funds provided by Companies to Technology incubators like Campus in Technology institutions approved by Ministry of Science and Technology to qualify as a valid Corporate Social Responsibility (CSR) expenditure in line with the new Companies Bill.
- SMEs to enjoy non tax benefits for 3 years after they outgrow category
Infrastructure Sector
- Infrastructure Debt Funds (IDF) to be encouraged. Four infrastructure debt funds have been registered with SEBI; two more planned
- Tax free bonds issue to be allowed up to Rs 50,000 crore in 2013-14 strictly on capacity to raise funds from the market
- Government has decided to constitute a regulatory authority for the road sector
Banking / Finance / Insurance Sector
- India’s first women’s bank to be set up as a public sector bank by October 2013 with an initial capital of 1000 cr.
- Banks allowed to act as Insurance Brokers
- Banks KYC norms sufficient for insurance policies
- Group Insurance benefits to be extended to several new groups
- All PSU Banks to have ATMs in one year
- Post Offices to offer Core Banking Solutions
- PFRDA and Insurance Laws amendment bills to tabled in the budget session
- NHB to set up Urban Housing Bank
- Inflation indexed Bonds and NSCs to be issued
Non-renewable energy Sector
- Low interest rate funds to be provided from Clean Energy Fund for green projects for a period of five years
- Generation based incentives to wind energy projects reintroduced
Miscellaneous
- Nirbhaya Fund to be constituted with a corpus of Rs. 1000 cr for women safety and security
- Auction of 839 new FM channels licenses to cover all cities with a population of > 1 Lac
- National Skill Development Corporation to formulated for Training Curriculum
- Direct Benefit Transfer Scheme for Poor to continue
