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UNION BUDGET 2013 - 14

UNION BUDGET 2013 - 14. TAX & INVESTMENT VIEW POINT. Reduction in Tax Rates, Increase in rates of Depreciation, Amnesty Scheme to fund infrastructure, Issue of Sovereign Bonds. Stability & Growth gets prominence and not Election Politics. The Gujarat effect ?.

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UNION BUDGET 2013 - 14

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  1. UNION BUDGET 2013 - 14 TAX & INVESTMENT VIEW POINT

  2. Reduction in Tax Rates, Increase in rates of Depreciation, Amnesty Scheme to fund infrastructure, Issue of Sovereign Bonds...

  3. Stability & Growth gets prominence and not Election Politics. The Gujarat effect ?

  4. Budget announcements before Presentation of the budget ! • FDI in multibrand Retail. • Increase in price of petroleum products. • Increase in the Import Duty on Gold from 4% to 6%. • Ground work to pass the Insurance & Pension Bills. • Kick starting process for granting new banking licenses. UNION BUDGET - 2013 - 14 - BACKDROP

  5. GDP Trend & Forecast Source : Central Statistics Office, RBI

  6. Shares of various sectors of the economy in the GDP Source : Central Statistics Office, RBI

  7. Inflation Rate (Jan - '13) (Jan - '13)

  8. Savings Rate

  9. Trends in global stock markets % change during the year * for the period from January 1 to February - 2013 UNION BUDGET - 2013 - 14

  10. Foreign Exchange Reserve, FDI & FII Flows Till Jan-'13 Till Dec'12 Till Dec'12 At Jan. end Source : indiabudget.nic.in

  11. Foreign Trade Current Account Deficit Estimated Estimated Oil, Coal, Gold - Major drain on Forex Source : pmindia.gov.in & FM Speech

  12. Fiscal Deficit

  13. Defence outlay • Defence budget total size : Rs. 2,03,000 crore. • Capital outlay for modernization of equipment : Rs. 86,740 crore. • Revenue outlay for pay and allowances and related expenses : Rs. 1,16,931 crore. • What the armed forces had to return : around Rs. 14,900 crore

  14. Some Important Announcements Provision for GST Rs. 9,000 Crores

  15. Some Important Announcements Investment Allowance A tax break given to companies for investment of Rs. 100 Cr. and above in plant and machinery and is over and above depreciation benefits enjoyed by them. Inflation - Indexed Bonds These bonds are aimed at helping savers protect the principal and interest their investments. The principal rises with higher inflation. Thrust on PPP in Coal Mining, Policy Soon Public Private Partnership to help boost supply of coal to power producers and other consumers. Big Push for Highway Sector Government to award contracts for 3,000 km roads by September and set up a regulator for the sector.

  16. Some Important Announcements Dividend Distribution Tax on Mutual Fund

  17. Some Important Announcements Securities Transaction Tax

  18. Some Important Announcements • Condition for Rajiv Gandhi Equity Scheme relaxed, a bit. • Infrastructure Tax Free Bonds for Rs. 50,000 corers to be issued in 2013 - 14. • MSME's Non Tax Benefits to stay for 3 years.

  19. Income Tax • Rebate of Rs. 2,000/= for individual having Total income upto Rs. 5 lakhs. • Additional deduction for interest on borrowing loan Sec 80 EE - Virtually no benefit. • Surcharge @ 10% on Individual / HUF's having admittedincome above Rs. 1 crore.

  20. Income Tax Historically, lower tax rates have yielded higher tax revenue !

  21. Income Tax We are fortunate... Unfortunately, we do not get in return the worth of the taxes paid.

  22. Income Tax • TDS on transfer of Immovable property Rs. 50 Lac and above. Does not apply to agricultural lands. Dropped last year again reintroduced. • Wealth Tax Returns also to be filed electronically. • Keyman Insurance Policy even after assignment shall continue to be Keyman Insurance only. Effective on policies after 1st April 2014.

  23. Income Tax • Transfer of immovable property below stamp duty valuation. The principle of Sec 50C (Capital Gains) made applicable to Stock in trade also under new Sec 43CA. • Transfer of Immovable property below stamp duty value, difference above Rs. 50,000/= shall be deemed income of the buyer under Sec. 56. • Return filed without payment of taxes shall be considered as a defective return.

  24. Income Tax Definition of Capital Assets in regard to Agricultural Land changed. Existing : Land situated beyond 8 kms from limits of town / city with a population of 10000 and above, not considered as capital asset. Proposed : Population Range Distance 2 kms 10000 to 1 lakh 6 kms 1 lakh to 10 lakh 8 kms 10 lakh and above Shortest distance - Aerial distance shall be considered.

  25. Income Tax Some Amusing Facts... • There are just 3.5 corers Income Tax Payers in the country, which is just 2.5% of the total population • 44% of the Income Tax Payers pay Rs. 1,000/= or less Income Tax. • 89% Income Tax Payers contribute just 11% of the total tax collected. • 33% of total Income Tax is collected from Mumbai.

  26. Indirect Taxes • Presently all the offenses under Customs Act / Central Excise Act & Service Tax Act are bailable. Draconian provision to make arrest unbailable if default exceeds a certain amount. • Amnesty Scheme for Service Tax assesses.

  27. Expections

  28. We should all look at the budget this way... Honestly, I have never expected anything from any budget ! My perspective is simply that, as a manager it's not my prerogative to dwell ON the system. My responsibility is to deliver IN the system by ensuring that, for the same external conditions, Bajaj does better than its comptition. Rajiv Bajaj - Managing Director Bajaj Auto Ltd.

  29. Thank you...

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