2. WHAT IS BUDGET
An Estimates Of Income And Expenditure For A Set Period
Of Time
THE PROCESS FOR PREPARING A MONTHLY BUDGET
INCLUDES:
Listing of all sources of monthly income
Listing of all required, fixed expenses, like
rent/mortgage, utilities, phone
Listing of other possible and variable expense
3. INFLATION
This year's budget will have a "softening impact" on price growth.
Inflation-indexed bonds
Also, to wean away investments in securities like gold, the
Finance Minister proposed financial instruments such as
inflation-indexed bonds so as to protect personal savings from
inflation.
4. How do you raise taxes while keeping
voters happy? explain how the
government will be able to increase its
revenues, while also encouraging the
business investment and boosting
consumer spending.
5. TAX FOR THE RICH
India recently joined the ranks of many Western
countries with talk of raising taxes for wealthy
individuals.
SANJAY SANGHVI, partner at law firm Khaitan &
Co., expects “some kind of additional surcharge on an
income beyond a certain threshold.”
6. A surcharge is a tax on tax. For instance, if your tax
liability for a year is 10,000 rupees ($185), the surcharge
would be a tax on 10,000 rupees. Tax consultants expect a
surcharge of around 10%, which in this case would
translate to 1,000 rupees. Thus, the individual’s total tax
liability would be 11,000 rupees ($203).
CONTINUE
7. A standard practice of Indian finance ministers is to
give some minor tax breaks to all individuals, and Mr.
Chidambaram could keep this tradition alive.
Last year, then Finance Minister Pranab
Mukherjee raised the threshold below which individuals
didn’t have to pay tax. Following that, an annual income
of less than 200,000 rupees was exempt from tax, up from
180,000 rupees previously.
This year there is a “further increase in the minimum
exemption limit,”
TAX BREAKS
8. INCENTIVES FOR EQUITY
INVESTMENTS
Mr. Chidambaram said last month that he would make the Rajiv
Gandhi Equity Savings Scheme, a program that gives tax breaks to
first-time stock investors, more attractive.
He could do so by raising the tax break for making stock and stock
mutual fund investments.
Currently, for an equity investment of up to 50,000 rupees in a
year, individuals can save a maximum of 5,000 rupees – a paltry
sum for many.
9. DIESEL CAR TAX
There may be bad news for owners of diesel cars. Some types
of diesel cars have historically attracted a lower duty compared
to similar petrol cars, but this may change.
A diesel car with an engine capacity of between 1300 cc and
1500 cc currently incurs a duty of 12%, whereas a petrol
version with the same engine capacity draws duty at 24%.
“There has been talk that [duty on] diesel cars might also be
raised,”
Car companies will likely pass on that additional cost to
consumers.
10. EXCISE DUTY
The government increased the overall excise tax by 2
percentage points to 12%.
This tax is applicable to goods produced in the
country, such as consumer durables like washing
machines and refrigerators.
Manufacturers of these goods typically add this cost to
the sale price of their goods.
11. Duty-free limits raised to Rs 50,000 for men and Rs 1 lakh for
women on gold.
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.
CONTINUES
12. DRINKING WATER
15,260 crore allocated to Ministry of Drinking Water and
Sanitation.
1,400 crore provided for setting-up of water purification
plants in 2000 arsenic
12000 fluoride-affected rural habitations.
13. HIGHLIGHTS AND IMPACT OF THE UNION
BUDGET 2013-14 ON THE EDUCATION SECTOR
Rs 1 lakh crore allotted for enhancing skills of youth
India to get its first all-women’s bank: FM
Allocation of Rs 65,867 crore to education ministry, up 17%
Tax Free Bonds – Will allow some organisations to raise funds
strictly based on need
14. RAILWAY
Railway Minister Pawan Kumar Bansal announced
introduction of 19 new train services.
Bansal had already announced introduction of 106 new
trains including mail/express passenger and local trains on
January 26 in his maiden Rail Budget 2013-14.