Budget 2013 -14 was awaited with lots of expectations and hopes. The budget, announced by the Finance minister today, was received with mixed feeling by the common population.
Finance Minister announced the Budget 2013 today. This is his eighth finance budget and the first one after returning to the Finance Ministry, as its head last year. The budget slightly slapped the top-earners by imposing overload on their shoulders. Many of the luxury items will become costlier while a few common goods will become cheaper.
Foreseeing the 2014 general election, the Finance Minister remained highly keen to offer some sops to the tax payers (income). On the other hand; by raising the duties on luxury and imported vehicles, mobile phones and cigarettes, the finance minister slapped the ‘ultra-rich’ millionaires of the country.
Tax Proposals in the Budget 2013 -14
The budget proposed to raise an additional Rs.18,000 Cr in the form of tax. However the budget has not made any changes in any of the tax-slabs. Mr. Chidambaram gave a tax benefit of Rs.2000 to all the individual tax payers with income up to Rs.5 lakh.
As there is no alteration and revision of slabs the income payers will have to pay as per the existing slabs. As per the existing rates an individual with income between Rs.2 to Rs.5L will have to pay 10%. In the same way, those with above Rs.5L will have to pay 20% and those above Rs.10L will have to pay 30%.
Budget 2013-14 also proposed to levy a 10% surcharge on the corporates which have an income over Rs.1 Cr per year and less than Rs. 10 Cr per year. Those domestic corporates which have an income above Rs.10 Cr per year, will have to pay an additional 5 to 10% surcharge.
Corporate Tax for Foreign Firms
Regarding the foreign firms, the rate of increase in the surcharge will be 2 to 5%. This is mainly because these firms are already levied higher rate of corporate tax. On dividend distribution tax, the current surcharge rate will be raised from 5% to 10%. An inheritance tax of 1% on transfer of any immovable property of above Rs.50 lakh is also imposed in the new Budget.
Price will go up for:
With the 18% excise duty levied on cigarettes, cigars, cheroots and cigarillos, the prices for these items will be growing. Besides Cigarettes and Cigars, Mobile phones, imported luxury cars, Marbles, High-end motor vehicles, SUVs, Silver, and dining in air conditioned restaurants, Set-top boxes, etc. will also be costlier now.
Price will be brought down for:
With the new budget Cotton garments, Jewelry items and ornaments, Agricultural testing procedures, Cinema and films, Ships and vessels, Machinery for manufacturing of leather goods, etc. will become cheaper.
How the Budget 2013-14 affect home buyers?
The budget includes an additional deduction of interest of Rs.1 lakh and Rs.1.5 lakh for home loans above Rs.25 lakh and up to Rs.25 lakh respectively. However this will benefit only the first-time home buyers. This additional amount of deduction is more than the existing deduction of Rs.1 lakh for the self-employed group.
Import Duty and Customs Duty
Import duty for high-end cars and other motor vehicles, motorbikes and yacht will be raised from 75% to 100%. With a 3% rise in the import duty for SUVs, the new rate will be 30%.
There is an increase in the duty free gold jewelry which a male and a woman-passenger can carry. A male passenger can carry Rs.50,000 worth gold jewelry while a woman-passenger is allowed to carry gold jewelry worth Rs.1 lakh with her.
Budget 2013-14 also increased the Defense-allocation. With the increase Rs.2,03,672 Cr will be separated for defense purpose. The amount includes Rs.86,741 for the capital expenditure.
So to say there are many who feel that the Budget 2013-14 is one that nails down the high earners. Yet the common man also does not find anything suitable for him or supportive to him in needs. There are others who opine that the Budget could have imposed import duty on Gold and should have avoided the additional service charge imposed on luxury restaurants.
KV Kamath, Chairman of Infosys, said that the Budget 2013-14 creates a feel-good atmosphere. He was speaking about the budget 2013-14 and added that this is mainly because it is a promising one; promise of discussing the issues elaborately.
Speaking about the imposition of new taxes, Mr. Mukesh Butani, Chairman of tax consultancy firm BMR Advisors, opined that the imposition of any new tax would be unwelcomed as it will raise the compliance burden. Anuj Puri, Chairman Jones Lang LaSalle India also opined that the budget is not up to the expectation and realistic in dealing with the economic conditions existing in India.