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28th February 2013 *
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BUDGET 2013-14 SPECIAL
Finance Minister P Chidambarampresented his 8th Union Budget and 82nd for the country on 28th February 2013.

DIRECT TAX
Personal tax rates/slabs remain unchanged
Tax credit of Rs 2,000 for individuals having total income up to Rs 5 lakh (Section 87 has also been consequentially
amended).
No change in tax rates for companies
Person taking home loan for the first time will get tax cut of Rs 1 lakh [the amount of loan sanctioned does not exceed
Rs. 25lakhs Section (inserting a new section 80EE in the Income-tax Ac)]
No change in Education Cess
Sunset clause has been extended till 31 March 2014 for undertaking engaged in generation and / or distribution /
transmission of power.
GAAR guidelines effective from 1/4/2016 recommendation of Shome Committee to be incorporated
Rules on Safe Harbor to be introduced
DTC to be finalized Bill to be introduced before end of budget session
No change in Custom Duty/Excise Duty
Donations made to National Children Fund eligible for 100 percent deduction.
Investment allowance at the rate of 15 percent to manufacturing companies that invest more than Rs.100 crore in plant
and machinery during the period 1.4.2013 to 31.3.2015.
Concessional rate of tax of 15 percent on dividend received by an Indian company from its foreign subsidiary proposed
to continue for one more year.
A final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to shareholders through
buyback of shares.

SURCHARGE
Increase surcharge from 5% to 10% for domestic company whose income is above 10cr
Increase surcharge from 2% to 5% for foreign company
DDT increase surcharge from 5% to 10%
Persons/HUF whose taxable income of over Rs 1cr surcharge of 10%
Additional surcharges to be in force for only one year.

TDS
TDS at 1% on transfer of immovable property where consideration exceeds Rs 50L
TDS of 20% on buy back of shares
TDS of royalty /FTS to non-residents 10% to 25%
Agricultural land to be exempted.


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INDIRECT TAX
No change in the normal rates of 12 percent for excise duty and service tax.
No change in the peak rate of basic customs duty of 10 percent for non-agricultural products.

CUSTOMS
Period of concession available for specified part of electric and hybrid vehicles extended upto 31 March 2015.
Duty on specified machinery for manufacture of leather and leather goods including footwear reduced from 7.5 to 5
percent.
Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 percent.
Export duty on de-oiled rice bran oil cake withdrawn.
Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on ungraded ilmenite.
Concessions to air craft maintenance, repair and overhaul (MRO) industry.
Duty on Set Top Boxes increased from 5 to10 percent.
Duty on raw silk increased from 5 to 15 percent.
Duties on Steam Coal and Bituminous Coal equalised and 2 percent custom duty and 2 percent CVD levied on both
kinds coal.
Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and similar vessels increased.
Duty free gold limit increased to Rs.50,000 in case of male passenger and Rs.1,00,000 in case of a female passenger
subject to conditions.

EXCISE DUTY
Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In case of spun yarn made
of manmade fibre, duty of 12 percent at the fibre stage.
Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.
To provide relief to ship building industry, ships and vessels exempted from excise duty. No CVD on imported ships and
vessels.
Specific excise duty on cigarettes increased by about 18 percent. Similar increase on cigars, cheroots and cigarillos
Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as taxies.
Excise duty on marble increased from 30 per square meter to 60 per square meter.
Proposals to levy 4 percent excise duty on silver manufactured from smelting zinc or lead.
Duty on mobile phones priced at more than 2000 raised to 6 percent.
MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha, Homeopathy and bio-chemic
systems of medicine to reduce valuation disputes.

SERVICE TAX
I ncluded in the negative list for service tax
o Vocational courses offered by institutes affiliated to the State Council of Vocational Training
o Testing activities in relation to agricultural produce
Proposals to levy Service Tax on all air conditioned restaurant.
Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema halls.
For homes and flats with a carpet area of 2,000 sq. ft. or more or of a value of 1 crore or more, which are high-end
constructions, where the component of services is greater, rate of abatement reduced from 75 to 70 percent.
A onetime amnesty scheme called Voluntary Compliance Encouragement Scheme
o Defaulter may avail of the scheme on condition that he files truthful declaration of Service Tax dues since
1st October 2007.
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GOOD AND SERVICES TAX
A sum of Rs. 9,000 crore towards the first installment of the balance of CST compensation provided in the budget.
Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.


WHATS CHEAPER? & WHATS COSTLIER?
WHATS CHEAPER? WHATS COSTLIER?
No excise duty for handmade carpets of choir and
jute.
Vocational courses and testing activities in relation
to agriculture to be exempt of service tax.
To reduce abatement rates on luxury apartments.
Lower Securities Transaction Tax on mutual funds
Duty-free Gold limit raised
Excise duty on Cigarette increased by 18%
6% percent duty on mobile phones that cost above
Rs 2000
Eating out to get more expensive. All A/C
restaurants will have to pay service tax.
100% custom duty on luxury cars
4% duty on silver
Duty on set up box to be increased
TDS at 1 per cent on properties being sold for
more than Rs 50 lakh.


CAPITAL MARKET
SECURITIES TRANSACTION TAX (STT)
Securities Transaction Tax (STT) reduced to 0.01% from 0.017% as under:
Sl.No. Nature of taxable securities transaction Payable by Existing Rates
(in per cent)
Proposed Rates
(in per cent)
1 Delivery based purchase of units of an equity
oriented fund entered into in a recognised stock
exchange
Purchaser 0.1 Nil

2 Delivery based sale of units of an equity oriented
fund entered into in a recognized stock exchange
Seller 0.1 0.001
3 Sale of a futures in securities Seller 0.017 0.01
4 Sale of a unit of an equity oriented fund to the
mutual fund
Seller 0.25 0.001


The proposed amendments in the rates of securities transaction tax will be effective from 1st June, 2013 and will
accordingly apply to any transaction made on or after that date.

COMMODITY TRANSACTION TAX (CTT)
Introduction of CTT (Commodities Transaction Tax) 0.01%
Commodity Transaction Tax (CTT) levy on non agricultural contracts. Agricultural commodities will be exempted.
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BUDGET INTERPRETATIONS
Sectorial impact Effect on Capital Market
Automotive
Increased duties on high end vehicles

Carmakers
Excise Duty on SUV's raised

Tata Motors, M&M
Jawaharlal Nehru National Urban Renewal Mission (JNNURM) allocated
Rs14873 crore

Ashok Leyland,
Tata Motors
Completion of 1,200 kms of electrification and gauge conversion of 450 kms
from narrow gauge to broad gauge

Hind Rectifiers
Banking and financial services
Securities Transaction Tax (STT) reduced

IIFL, Motilal Oswal,
Religare
Power sector - tax holiday extended to 31 March 2015
Bank correspondents can sell micro finance products

SKS Micro
Consumer Durables/ Non-Durables
30% increase in plan expense

Infra, consumers
Engineering and capital goods
3000 kms of road awards

L&T, IRB, IVRCL
Higher allocation for wind energy

Suzlon Energy
Regulatory authority for road sector

IRB Infra
Higher allocation for water treatment

Triveni Engineering
Retail and real estate
1% TDS on real estate transaction revived
Rate of abatement on high cost reduced

DLF
Tobacco
Excise Duty on cigarettes up 18%

ITC
Defence
Higher allocation to defence

BEML, M&M


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