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Union Budget 2013-14
Chidambaram offers minor sops to low income tax payers

NEW DELHI: Walking the tightrope ahead of next year's elections, Finance Minister P Chidambaram on Thursday offered minor sops to income tax payers but slapped a 10 per cent surcharge on 'super-rich' individuals and corporates, levied a new tax on land and house transfer 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 the 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. — PTI

Highlights of Union Budget 2013-14

Tax credit of Rs 2,000 for income upto Rs 5 lakh

Surcharge of 10 per cent for taxable incomes above Rs 1 crore, No review of tax slabs

100% tax on high-end vehicles, 60% on imported bikes above 800cc, 25% tax on yachts

Commodity transaction tax for non-agri commodity trading

Rs 532 crore to make post offices part of core banking

Duty-free limits raised to Rs 50000 for men and Rs 1 lakh for women

18% rise in excise duty on cigarettes, cigars and cheerots

Service tax on all A/C restaurants

Royalty tax hiked from 10% to 25%

Tax Deducted at Source to be fixed at 1% on land deals over Rs 50 lakh

No change in peak custom, excise rates.

5 to 10 per cent surcharge on domestic companies whose taxable income exceeds Rs 10 crore

11 lakh beneficiaries have received benefit under Direct Benefit Transfer scheme

Administration reform commission proposed

Rs 5,87,082 crore to be transferred to states under share of taxes and non plan grants in 2013—14

Rs 1,000 crore each for women, youth funds

Rs 1,000 crore for Nirbhaya fund

Promise to women, youth and senior citizens

289 more cities to get private radio FM stations

Grant of Rs 100 crore each to AMU (Aligarh), BHU (Varanasi) and TISS (Guwahati) and INTACH

"Rs 6275 crore to Ministry of Technology, Rs 5216 crore to Department of Space, Rs 5280 crore to Department of Energy. These amounts are substantial increases."

Rs 2 trillion for defence sector

First housing loan up to Rs 25 lakh would get additional deduction of interest of up to Rs 1 lakh

Insurance companies can now open branches in Tier 2 cities and below without prior approval. All towns of India with a population of 10000 or more will have an LIC branch and one other public sector insurance company.

Income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme is raised to Rs 12 lakh from Rs 10 lakh

All public-sector banks have assured the Finance Minister that they will all have ATMs in their branch areas by 2014

India's first women's bank as a PSU proposed, Rs 1,000 crore working capital announced

Regulatory authority to be set up for road sector

Four Infrastructure debt funds have been registered

Rs 7 lakh crore target fixed for agri credit for 2013—14 compared to Rs 5.75 lakh crore in the current year.

Eastern Indian states to get Rs 1,000 crore allocation for improving agricultural production.

Green revolution in east India significant. Rice output increased in Assam, Odisha, Jharkhand and West Bengal;

Rs 500 crore allocated for programme on crop diversification

Average annual growth rate of agriculture and allied services estimated at 3.6 per cent in 2012—13 when 250 MT foodgrains was produced

Rs 27,049 crore allocation to the Agriculture Ministry in 2013—14

Rs 14,873 crore for JNNURM for urban transportation in 2013—14 against Rs 7,880 crore in the current fiscal

Foodgrain production in 2012—13 will be over 250 million tons

Rs 15,260 crore to be allocated to Ministry of Drinking Water and Sanitation.

Rs 80,194 crore allocation for Ministry of Rural Development in 2013—14. About Rs 33,000 crore for MGNREGA

Rs 5,000 crore for NABARD for agri storage facilities

Godowns to be constructed with help of panchayats. Food grain productions have been raised drastically and only increase with each year.

Rs 17,700 crore to be allocated for Integrated Child Development Scheme (ICDS): FM.

“National Food security bill is a promise of the UPA government. I hope the bill be passed as soon as possible. I have set apart Rs 10,000 crore to the expected cost of the act.”

An Institute for agricultural biotechnology will be set up in Ranchi, Jharkhand.

Rs 1069 crore allocated to Department of Aryush

Rs 4,727 crore to be allocated for medical education and research. Rs 1,069 crore to be given to Department of Ayush.

Medical colleges in six more AIIMS—like institutions to start functioning this year; Rs 1650 crore allocated for the purpose.

Rs 37,330 crore allocated for Ministry of Health & Family Welfare.

Rs 110 crore to be allocated to the department of disability affairs, says FM.

Additional sum of Rs 200 crore to Women and Child Welfare Ministry to address issues of vulnerable women.

Rs 3511 crore allocated to Minority Affairs Ministry which is 60 per cent of the revised estimates.

Rs 13215 crore for mid-day meal programme: Chidambaram

The idea of setting up a PNGSY-2 causes uproar in the Parliament. The minister is interrupted the round of shouting, who clarifies that states that have completed PNGSY -1 will get the second version, the rest will continue under the first version

The Right to Education Act is firmly in place, says Chidambaram, while announcing Rs. 27,250 crore to Sarva Shikhsa Abhiyaan in FY14.

The Human Resources Development ministry meanwhile gets Rs. 65,867 crore, a rise of 17% from revised estimates.

"Government committed to reconstruction of Nalanda University" - But no specific funds for the project was announced.

Chidambaram announces additional fund allocation of Rs 200 crore to the Women and Child Development Ministry. He says women 'belonging to the most vulnerable groups must be able to live with self-esteem and dignity'.

169 crore given for development of Ayurveda, Siddha, Unani (Natural medicine) and homeopathy

Rs 41,561 crore for SC plan and Rs 24,598 crore for tribal plan. The move comes with a strong statement. — Agencies

SUVs, smartphones, cigarettes to cost more

NEW DELHI: Sports utility vehicles, imported cars and motorcycles, high-end mobile phones, eating out at air-conditioned restaurants and cigarettes will become costlier with Finance Minister P Chidambaram deciding to impose higher taxes on these items.

On the other hand, there is good news for ladies as far as jewellery is concerned as they will be allowed to bring more duty free gold items provided they have stayed out of India for more than year.

Moreover, branded apparels will become cheaper as there will be zero excise duty on the item. Carpets and other textile floor coverings of coir or jute will also become less expensive as they have been fully exempted from excise duty.

In his Budget proposals for 2013-14, Chidambaram said excise duty on Sports Utility Vehicles (SUV) will be raised to 30 per cent from 27 per cent.

“SUVs occupy greater road and parking space and ought to bear a higher tax... However, the increase will not apply to SUVs registered as taxis,” Chidambaram said.

Targeting the “affluent class in India that consumes imported luxury goods such as high end motor vehicles, motorcycles, yachts and similar vessels”, he said: “I am sure they will not mind paying a little more.”

Subsequently, basic customs duty on new passenger cars and other motor vehicles (high-end cars) costing more than USD 40,000 and/or engine capacity exceeding 3,000cc for petrol run vehicles and exceeding 2500 cc for diesel run vehicles has been hiked 100 per cent from 75 per cent earlier.

Likewise, duty on yachts and similar vessels has also been raised to 25 per cent from 10 per cent.

In a blow to mobile handset makers, excise duty on instruments priced above Rs 2,000 has been raised to six per cent but the concessional excise duty of one per cent and has been kept unchanged in the case of low priced phones.

Smokers will also have to shell out more for their puffs with Chidambaram training his eyes on them for more tax revenues.

“What does a Finance Minister turn to when he requires resources? The answer is cigarettes. I propose to increase the specific excise duty on cigarettes by about 18 per cent. Similar increases are proposed on cigars, cheroots and cigarillos,” he said while delivering the Budget speech.

Eating out at air conditioned restaurants will also become more expensive with the Finance Minister bringing it under the purview of service tax. At present, service tax of 12 per cent does not apply to A/C restaurants that do not serve liquor.

“The distinction is artificial, and I propose to levy service tax on all air conditioned restaurants,” he said.

Homes and flats with a carpet area of 2,000 sq ft or more or of a value of Rs 1 crore will also become more expensive as the rate of abatement for this class of buildings has been reduced from 75 per cent to 70 per cent.

Silk clothes made using imported raw materials will become expensive as customs duty on raw silk of all grades has been increased to 15 per cent from 5 per cent.

Set top boxes will also become costlier with basic customs duty on the item has been increased 10 per cent from from 5 per cent. — PTI

India’s first all-woman bank by Oct

NEW DELHI: The country is all set to get an all-woman bank by this year with the government announcing an initial capital of Rs 1,000 crore for the purpose.

Announcing the Budget proposals for 2013-14, Finance Minister P. Chidambaram said the bank is likely to be set by October this year.

“I...propose to set up India’s first women bank as the public sector. I shall provide Rs 1,000 crore as initial capital. I hope to obtain the necessary approval and banking licence by October, 2013,” he said.

The proposed bank will lend mostly to women and women run businesses, support women SHGs and women’s livelihood, he said.

It will employ predominately women which addresses the gender related issues and empowerment and financial inclusion, he added. — PTI

Left Front retains Tripura 

Agartala: The ruling Left Front in Tripura got a two-thirds majority in the 60-member Assembly with the CPI(M) winning 45 seats and CPI one seat.

The Left Front returns to power for a fifth straight term since 1993 and is headed for a two-thirds majority.

The Congress has wound up with seven seats and was leading in seven constituencies while its ally INPT and NCT have drawn a blank so far.

Prominent winners of the Left Front are Chief Minister Manik Sarkar, Jail Minister, Manindra Reang, Finance Minister Badal Chowdhury, Agriculture Minister Aghore Debbarma and Industries Minister Jitendra Chowdhury.

Sarkar won the Dhanpur Assembly seat defeating his nearest Congress rival Shah Alam by 6,017 votes.

Congress candidate Jitendra Sarkar has won from Barjala. Jitendra Sarkar, a former Speaker, had joined Congress. — PTI

NPF gets absolute majority in Nagaland

KOHIMA: The ruling Naga Peoples Front (NPF) on Thursday won absolute majority in the 60-member Nagaland Assembly securing 31 seats.

Prominent among those who were re-elected were Chief Minister Neiphiu Rio, who won the Northern Angami II seat for the sixth consecutive time by 12,671 votes, and will look to retain the post for the third straight time in the 12th Nagaland Assembly. He defeated Congress rival Kevise Sogotsu.

Speaker Kiyanilie Peseyie won Western Angami seat for the third time defeating his Congress rival Asu Keyho by 1,000 votes.

The NPF, which was the major partner in the Democratic Alliance of Nagaland, had fielded candidates in all the seats.

Polling was held in 59 of the 60 seats as the Congress candidate of Tuensang Sadar seat P. Chuba Chang died before the polling day on February 23.

The Congress, which contested in 57 seats, is trailing far behind winning in four and leading in just two seats, while the NCP has won in two seats and is leading in another two.

Among the Congress winners are Nagaland PCC chief S.I. Jamir from Dimapur II constituency where he drubbed his nearest independent rival Savi Liegise by 1,615 votes.

The JD(U), which contested in three seats, won one seat and independents in three. Independents were leading in three other seats.

The BJP, which entered the fray in 11 seats, got its maiden win in Tizit.

Of the two women candidates, Rakhila who was fielded from Tuensang Sadar II seat by the BJP was defeated by the NPF. The result of the other woman candidate Yangeria, who contested as an independent from Mokokchong town, is yet to be announced. — PTI