The Finance Minister presented the 2013-14 Union Budget which included the following key points: 1) No changes to income tax slabs but a 10% surcharge on income over 1 crore and tax rebates for some earners. 2) Measures to simplify rules for foreign investors and allow more foreign investment in stock exchanges and debt markets. 3) Increased allocations to key sectors like defense, health, education, and agriculture while imposing some new taxes and duties. 4) The budget aims to boost growth but economic indicators still forecast slow growth amid a weak macroeconomic situation.

2. India’s Finance Minister P Chidambaram
presented his 7th Union Budget 2013-14 in
Parliament on February 28, 2013 @ 11am
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3. No revision in Income
Tax slabs
Surcharge of 10% would be imposed on those
earning over Rs 1 crore in a year, for 2013-14(the
super-rich)
Tax rebate of up to Rs. 2,000 p.a. for those earning
between Rs. 2 lakhs to Rs. 5 lakhs p.a.
Listed units of equity oriented funds included as
eligible investment under Rajiv Gandhi Equity
Saving Scheme. Income limit increased to Rs. 12
lakhs

4. One time interest deduction upto Rs. 1 lakh to
first time individual borrower of housing loan
below Rs. 25 lakhs for residential house costing
upto Rs. 40 lakhs
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5. For Capital Markets
Simplification by SEBI of procedures and uniform
registration and other norms for entry for foreign
portfolio investor to be prescribed
Clarity of what constitutes FII and FDI
investment
FIIs to be permitted to participate in exchange
traded currency derivative segment
SEBI to prescribe requirement for angel investor
pools to be recognised as Category I AIF venture
capital fund
Stock exchanges allowed to introduce a dedicated
debt segment

6. Budget Impact on Sensex & Nifty
Bombay Stock
Exchange Sensex National Stock
fell by 403 points Exchange Nifty
to a 3-month low fell by 141 points
post budget to a 3-month low
post budget
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7. For Women
 An all-women bank by November
2013 with an initial capital of Rs 1,000
crore
 Rs 1,000 crore Nirbhaya Fund, named
after Delhi gangrape victim, to
empower women
 Rs. 200 crore gender discrimination
fund to help single and the widow
women
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8. For the Corporates
 Surcharge on domestic companies increased to
10% from 5% and for foreign companies
increased to 5% from 2% if taxable income
exceeds Rs. 10 crore.
 Surcharge on Dividend Distribution Tax (DDT)
for domestic company increased to 10% from 5%.
 New section 32AC to provide for deduction for
investment in new plant or machinery in excess
of Rs. 100 cr.
 Unlisted domestic company buying back the
shares from shareholders subject to additional
income-tax at the rate of 20% on distributed
income - Effective 1 June 2013. Income arising to
the shareholder as a result of such buy back to be
exempt from tax.

9. Other key Provisions
 STT rates reduced wef 01/06/2013 and a new tax called CTT to be
levied on commodities derivatives, other than agricultural
commodities, traded in recognised associations @ 0.01% on seller.
 Tax to be deducted at 1% on sale of Land or building exceeding Rs.
50 lakhs. Agricultural land excluded.
 The rate of tax on income distributed by all non-equity Funds to an
individual or HUF increased to 25% from 12.5%.
 Tax on income distributed by infrastructure debt funds set up as
mutual funds to be reduced to 5% for parity with infrastructure
debt funds set up as NBFCs
 Single Bench of the Tribunal can dispose of appeals upto "fifty lakh
rupees".
 Service tax will be charged on specified vehicle parking area.
 Service tax will be leviable on taxable service provided in
restaurants with air-conditioning or central air heating
 Service Tax Amnesty Scheme / Voluntary Disclosure Scheme is
proposed

10. Economic Indicators
 Estimated GDP growth at 5% as against 6.2% in
FY12 and 9.3% in FY 11.
 Slow growth, coupled with slowdown in savings
and investments, feeding into inflationary
pressures and a rising current account deficit
paints a truly grim macroeconomic picture.
Encourage FDI  Though the policy announcements, such as
 relaxation in FDI caps (for aviation, broadcasting,
retail, insurance and pension),
 measures to reign in fiscal deficit (hike in price of
petrol and diesel and cap on the number of
subsidised cylinders) and
 the postponement of GAAR (General Anti
Avoidance Rules) implementation,
have improved the sentiment of investors and
credit rating agencies, but these are not sufficient to
revive economic growth.

13. Positive Impact on Industries
 Textile – due to Excise Duty exemption on Readymade garments
 Shipping - Excise duty exempted on ships & vessels
 Refinery - Changes in E&P policy positive for upstream sector
 Personal Care & FMCG - Reduced Countervailing duty on
dehulled Oat grains
 Leather Goods – Customs Duty reduced on P&M for leather &
footwear industry
 Electricals - Higher allocation to defence +ve for BEL, BEML
 Finance - STT Reduced; +ve for Trading Members
 Power – u/s 80IA benefit for power plants extended
 Heavy Engineering & Infrastructure - Investment benefit for high
value projects positive for Capital Goods. Investment allowance of
15% or Capex. Rs 50000cr limit for Tax Free Infra Bonds. IDFs to be
encouraged. 30% Increase In Plan Expense. Rs 9,000 Cr allocated
for Port, Mine connectivity
 Construction & Contracting - Real Estate – Rs 2000cr to be allotted
to Urban Housing Fund

14. Negative Impact on Industry
 Auto - Increased excise duties on high end vehicles
negative for carmakers from 27 to 30%
SUVs, imported cars to be costlier
Honda Civic, Maruti SX4 & Toyota Altis aslo covered.
 Banking - Farm loan interest subvention negative. 4% farm
loan scheme extended to private sector banks
 Mobile phones - Excise duty increased from 1% to 6%.
 Cigarettes - Excise Duty on cigarettes up 18% negative for
ITC
 Construction & Contracting - Real Estate – Excise Duty on
marble slabs increased negative for real estate
 Media & Entertainment - Hike in duty on Set Top Box
negative for DTH Players

15. Major Allocations
Defence - Rs 2,03,672 crore
Health - Total
allocation Rs
2,03,672 crore
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Health Mission
to get Rs 21,239
crore
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Mid-day meal programme gets
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Rs 13,215 crore
Education - Rs 65,867 crore
Agriculture Rs 27,049 crore
SSA gets Rs 27,258 crore

16. “Health for all AND
education to all”

remains priority in this
year budget