Walking the tight rope ahead of next year’s elections,Finance Minister P. Chidambaram today offered minor sops to income tax payers but slapped a 10 per cent surcharge on ‘super-rich’ individuals and corporates,levied an inheritance tax and raised duties on mobile phones,cigarettes and luxury vehicles.
In his tax proposals in the Budget for 2013-14 to raise an additional Rs 18,000 crore,he gave a benefit of Rs 2,000 to individual tax payers with taxable income of up to Rs 5 lakh but made no change in either slabs or rates of personal income tax which will continue at 10,20 and 30 per cent.
Aiming at higher growth rate for inclusive and sustainable development and revive manufacturing,Chidambaram hiked outlays for health,water and sanitation,SCs/STs and tribals and rural development.
Defence allocation has been increased to Rs 2,03,672 crore,including Rs 86,741 crore for capital expenditure.
First-time home buyers will get an additional deduction of interest of Rs 1 lakh for home loans above Rs 25 lakh and Rs 1.50 lakh for home loans up to Rs 25 lakh. This will be over and above the current Rs 1 lakh deduction allowed for self-occupation.
Implementing the much-talked about super-rich tax,Chidambaram proposed to levy a 10 per cent surcharge on income of Rs 1 crore and above and a 5 to 10 per cent surcharge on domestic corporates whose income exceeds Rs 10 crore a year.
In the case of foreign companies,who pay a higher rate of corporate tax,the surcharge will go up from 2 to 5 per cent.
On dividend distribution tax,he proposed to raise current surcharge from 5 to 10 per cent.
Presenting his eighth budget,the first after coming back to Finance Ministry last year,Chidambaram imposed an inheritance tax of 1 per cent on transfer of immovable property of over Rs 50 lakh.
Continuing the education cess for all tax payers at 3 per cent,he promised that the new surcharges will be in force for just a year during 2013-14.
While the direct tax proposals will bring in Rs 13,300 crore,those on indirect tax side will rake in Rs 4,700 crore.
Bringing in the super-rich tax,Chidambaram said,”I believe there is a little bit of the spirit of Mr Azim Premji (of Wipro) in every affluent tax payer. I am confident that when I ask the relatively prosperous to bear a little more burden for one year,just one year,they will do so cheerfully.”
The Minister did not resist the temptation of burdening smokers when he raised the excise duty by 18 per cent on cigarettes,cigars,cheroots and cigarillos.
Including two more services in the negative list of service taxes,he extended the levy to all air-conditioned restaurants and introduced a one-time voluntary compliance scheme for about 10 lakh service tax defaulters to rake in more money.
High-end luxury motor vehicles,motorcycles and yacht will attract 100 per cent import duty,up from 75 per cent while SUVs will attract a higher excise duty at 30 per cent,up by 3 per cent.
Passengers will be allowed to bring in duty free gold jewellery of up to Rs 50,000 in case of men and Rs 1,00,000 in case of women.
There is no change in the peak rate of basic customs duty on non-agriculture products and rates of excise duty and service tax of 12 per cent.
Chidambaram introduced a commodities transaction tax on non-agriculture commodities futures contracts at the same rate as equity futures that is 0.01 per cent of the price of the trade.
*No change in income tax slabs
*Relief of Rs 2,000 for tax payers in tax bracket of Rs 2-5 lakh
*10 pc surcharge on persons with taxable income of over Rs 1 crore
*Tobacco products,SUVs and mobile phones to cost more
*Income limit under Rajiv Gandhi Equity Savings Scheme raised to 12 lakh from Rs 10 lakh
*First home loan of up to Rs 25 lakh to get extra interest deduction of up to Rs 1 lakh
* Duty free limit of gold import increased to Rs 50,000 for male passengers and Rs 1 lakh for female passengers
*India’s first women’s bank to be set up by October
* Concessional six per cent interest on loans to weavers
* Rashtriya Swasthya Bima Yojana benefit extended to rickshaw pullers,auto and taxi drivers,among others
* ‘Nirbhaya Fund’ of Rs 1,000 crore to empower women and provide safety in the wake of Delhi gang-rape incident
*Fiscal deficit for 2013-14 pegged at 4.8 pc of GDP and 5.2 per cent in 2012-13
*Plan expenditure pegged at Rs 5,55,322 crore and non-Plan at Rs 11,09,975 crore
*New taxes to collect Rs 18,000 crore for government
*Voluntary Compliance Encouragement Scheme launched for recovering service tax dues
*Rs 14,000 crore earmarked for capital infusion in public sector banks in 2013-14
*Refinance capacity of SIDBI raised to Rs 10,000 crore
*TUF Scheme for textile sector to continue in 12th Plan with an investment of Rs 1.51 lakh crore
*Rs 9,000 crore earmarked as first instalment of balance of CST compensation to states
*Defence allocation at Rs 203,672 crore,education Rs 65,867 crore and Rural Development Ministry Rs 80,194 cr
*Rs 10,000 crore earmarked for National Food Security towards incremental cost
*Farm credit target set at Rs 7 lakh crore as against Rs 5.75 lakh crore in 2012-13
*Direct Benefit Transfer scheme to be rolled out in the entire country during tenure of UPA government
*Commodity transaction tax of 0.01 per cent proposed on non-agri futures traded on commodity bourses
*Securities Transaction Tax brought down to 0.01 per cent
*No change in basic customs duty; normal excise and service tax rates unchanged at 12 per cent
*Handmade carpets and textile floor coverings of coir or jute exempted from excise duty
*Excise duty on SUVs increased to 30 per cent from 27 per cent
*Chidambaram says India to become USD 5 trillion economy,and among top five in the world by 2025