Union budget 2013 kumbhat

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UNION BUDGET 2013 KUMBHAT & CO., Chartered Accountants 04/03/2013 1 KUMBHAT & CO - MARCH 2013

Transcript of Union budget 2013 kumbhat

Page 1: Union budget 2013 kumbhat

UNION BUDGET 2013

KUMBHAT & CO.,

Chartered Accountants

04/03/2013

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BUDGETARY HIGHLIGHTS

Revised Estimates (RE) of the expenditure in 2012-13 at 96 per cent of the Budget Estimates (BE) due toslowdown and austerity measures.

During 2013-14, BE of total expenditure of Rs.16,65,297 crore and of Plan Expenditure atRs.5,55,322 crore.

‰Plan Expenditure in 2013-14 to grow at 29.4 % overRevised Estimates for the current year.

‰All flagship programmes fully and adequately fundedand sufficient funds provided to each Ministry orDepartment consistent with their capacity to spendfunds

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BUDGETARY HIGHLIGHTS

Plan expenditure is placed at Rs. 5,55,322crore.

‰Non Plan Expenditure is estimated atRs.11,09,975 crore.

‰Fiscal deficit for the current year contained at5.2 per cent and for the year 2013-14 at 4.8%.

‰Revenue deficit for the current year at 3.9 percent and for the year 2013-14 at 3.3 %.

‰By 2016-17 fiscal deficit to be brought down to 3%, revenue deficit to 1.5%

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BUDGETARY HIGHLIGHTS

ALLOCATION Amount in Crores

Programmes for Women 97134

Programmes for Children 77236

Health 37330

HRD 65687

Drinking Water 15260

Rural Development 80194

JNNRUM 14873

Agriculture 27049

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INVESTMENT IN INFRASTRUCTURE

Project Steps

Infrastructure Tax free Bonds Rs.50,000 crore to be issued in 2013-14

Warehousing Rs.5,000 crore to NABARD for Financing the

Construction of Warehouses

Roads 3000 Kms in Gujarat, MP, Maharashtra, Rajasthan

and UP

Industrial Corridors • Plans for 7 new cities finalised, 2 smart industrial

cities at Dholera, Gujarat and Shendra Bidkin,

Maharashtra

•Delhi Mumbai Industrial Corridor to be given

additional funds

•Chennai Bengaluru Industrial Corridor to be

developed

•Bengaluru Mumbai Industrial Corridor –

preparatory work commenced

Ports 2 new Ports – Sagar in WB and one in AP. Outer

Harbour in the VOC port, Thoothukudi to be

developed

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DIRECT TAX PROPOSALS

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ADDITIONAL REBATES/DEDUCTIONS

Rebate up to Rs. 2000/- if GROSS TOTALINCOME < Rs. 5 lacs for Individuals – Section87A.

Additional Interest deduction of Rs. 1 lac on 1st

Residential House, if loan taken from FI or Bankbetween 01.04.13 and 31.03.14, Loan should <Rs. 25 lacs, Cost of Residential house shouldnot be > Rs. 40 lacs. Rs. 1 lac only in total for 2Asst. years i.e 2014-15 and 2015-16 – forIndividuals – Section 80EE

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DEDUCTIONS UNDER CHAPTER VIA

Donation to National Children Fund – 100%

deduction – 80G

For Life Insurance Policy taken by person with

severe disability or suffering from specified

ailment then insurance premium up to 15% of

insured value allowed for deduction u/s 80C.

Donation made in Cash to political parties will

not be allowed u/s 80GGC

Rajiv Gandhi Equity Saving Scheme introduced

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RAJIV GANDHI EQUITY SAVINGS SCHEME

Deduction u/s 80CCG up to Rs. 25000/-

Investment in Equity Listed Securities andEquity Linked MF

The gross total income should not exceed Rs.12 lacs. First time investor.

The scheme has been extended for 3 years.

The investment should be locked for 3 years.

CAUTION: Invest only if you understand theEquity market.

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AGRICULTURE INCOME REDEFINED

If Farm House let out which is on agriculturalland in an area measured aerially, then it isnot agricultural income, if the agri land issituated

< 2 kms from local municipal limits if population is>10K but < 1 lac

< 6 Kms from local municipal limits, if population is> 1 lac < 10 lacs

< 8 kms from local municipal limits, if population >10 lacs

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AGRICULTURE LAND REDEFINED

No capital gains will arise on sale of agricultural landmeasured aerially, then it is not capital asset if theland is situated

< 2 kms from local municipal limits, if population is>10K but < 1 lac

< 6 Kms from local municipal limits, if population is > 1lac < 10 lacs

< 8 kms from local municipal limits, if population > 10lacs

Capital gains will arise on sale of agricultural land iflocated within this criteria. Agricultural land within theaerial distance will be subject to WEALTH TAX.

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SURCHARGE

Income – Corporates/Firms Rate

Less than Rs. 1 crore NIL

> Rs. 1 crore < Rs. 10 crore 5%

> Rs. 10 crore 10%

For Individuals Rate

< Rs. 1 crore Nil

> Rs. 1 crore 10%

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TDS AND DDT

NO change in Rates for all except

- Royalty and Technical fees paid to NON RESIDENT –TDS is @ 25% of such amount payable. – 115Aw.e.f. 1.4.13 ( AY 14-15)

TDS on purchase of immovable property other thanagri land and property < Rs. 50 lacs @ 1% - 194 IAw.e.f.1.6.2013 – Buyer to deduct the tax.

Dividend distribution tax to be paid by the Companyon BUY BACK of shares @ 20% on differencebetween allotment price and buy back price. Capitalgains continue to be payable on buy back of sharesin the hands of the shareholder.

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CAPITAL GAINS AND OTHER SOURCES

Any immovable property registered at lessthan guideline value, the seller needs to paycapital gains tax on the guideline/stamp dutyvalue – Sec 50C – existing provision

The buyer will have to pay regular incometax on the difference betweenguideline/stamp duty value and registeredvalue as Income from other sources Sec 56- w.e.f 1.4.13 ( AY 2014-15)

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BUSINESS INCOME/OTHER SOURCES

For a person in real estate business - anyimmovable property registered at less thanguideline/stamp duty value, the seller needsto pay income tax on the guideline/stampduty value – Sec 43CA – similar to existingprovision Sec 50C for capital gains

Difference between guideline value andregistered value will be income from othersources in the hands of the buyer!

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INVESTMENT ALLOWANCE

15% Investment allowance for investment in

Plant and Machinery over Rs. 100 crore.

Available over a period of 2 years AY 14-15

and AY 15-16.

Only for NEW Machinery Imported or

indigenous.

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GENERAL ANTI AVOIDANCE RULE – CHAPTER X A

An arrangement may be declared

impermissible tax benefit

To be effective from 1.4.2016

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TRC AND DTAA

Tax residency certificate is required to claim benefit under a DTAA. Circular 789 exists.

With the amendment, TRC is not sufficient condition, hence opens the discretion to the assessing officer. Will apply even if the assessee does not claim any benefit under DTAA Sec 90 and 90A

Clarification issued by Finance Ministry, The TRC will be accepted as evidence

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STT AND CTT

It is proposed to reduce securities transaction tax

('STT') rates on equity oriented funds (w.e.f. 1 June,

2013) as under:

- On delivery-based purchase on the exchange - from 0.1%

to Nil;

- On delivery-based sale on the exchange - from 0.1% to

0.001%;

- Sale of a unit to the mutual fund - from 0.25% to 0.001%.

Commodities Transaction tax at 0.01% on non-

agricultural commodity futures. CTT to be allowed as

deduction if income falls under the head 'Profits and

Gains from business or profession'

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INDIRECT TAX PROPOSALS

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SERVICE TAX

Vocational training Institutes approved by National and State Councils exempt

Seed testing exempt from Service tax

Penalty for non registration maximum penalty Rs. 10000

Personal Liability on Director/Secretary or other officer of Company if willfully evades tax, issues dummy bills, utilization of credit without actual receipt of taxable service, failure to pay service tax collected

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SERVICE TAX VOLUNTARY COMPLIANCE

ENCOURAGEMENT SCHEME 2013

New chapter VI

Scheme open from 1.3.2013 to 31.12.2013

Applicable only to a person against whom NO

- Inquiry or investigation has been initiated

- Search of premises

- Issuance of Summons

- notice issued for production of accounts etc

- audit has been initiated

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SERVICE TAX – VOLUNTARY DISCLOSURE

All service tax liability to be offered up to1.1.2013.Interest and penalty waived on totaltax dues.

Payment of such service tax declared to bepaid – atleast 50% by 31st Dec 2013 andbalance 50% by 30th June 2014.

Interest will be effective from 1st July 2014 @18% p.a.

No refund of the tax paid

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CUSTOMS DUTY

Stay granted for collection of Customs Duty for cases pending inAppellate Tribunal can be extended further upto 185 days after180days. In case appeal not disposed within 365 days, stays standsvacated.

Criminal Procedure Code of 1973 will be initiated if

- Evasion of duty exceeds Rs. 50 lacs

- Import of goods not declared of which market price > Rs. 1 crore

- Fraudulent availment of drawback or any exemption and dutyexceeds Rs. 50 lacs

Can attach all receivables if the duties are not paid

Customs duty to be paid within 2 days of arrival. Earlier it was 5days.

Even Re 1 is payable as duty. Earlier duty below Rs. 5 and belowwas ignored. Imported Samples will fall under this category

Rs. 100/- and below will not be refunded.

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EXCISE DUTY

Stay granted for collection of Excise Duty for cases pending inAppellate Tribunal can be extended further upto 185 days after180days. In case appeal not disposed within 365 days, staysstands vacated.

Criminal Procedure Code of 1973 will be initiated if

- Evasion of duty exceeds Rs. 50 lacs

-Fraudulent availment of drawback or any exemption and dutyexceeds Rs. 50 lacs

Can attach all receivables if the duties are not paid

Follow up SCN is valid with the original SCN

Service of notice by RPAD has been replaced by Speed Post,Courier – reversing certain case laws

Advance Ruling for New Business

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THANK YOU!!

[email protected]

PH: 0422-2541398/2546700

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