Transcript UNION BUDGET - 2013 - 14 - Ashutosh Financial Services Pvt. Ltd

UNION
BUDGET
2013 - 14
TAX
&
INVESTMENT
VIEW POINT
Reduction in Tax Rates, Increase in rates of
Depreciation, Amnesty Scheme to fund
infrastructure, Issue of Sovereign Bonds...
Stability & Growth gets prominence
and not Election Politics.
The Gujarat effect ?
Budget announcements before Presentation
of the budget !
 FDI in multibrand Retail.
 Increase in price of petroleum products.
 Increase in the Import Duty on Gold from 4% to 6%.
 Ground work to pass the Insurance & Pension Bills.
 Kick starting process for granting new banking
licenses.
UNION BUDGET - 2013 - 14 - BACKDROP
GDP Trend & Forecast
Sector
2009 - 2010 - 2011 10
11
12
Agriculture 0.8 % 7.9 %
2012 13
2013 14
3.6 %
1.8 %
2.8 %
Industry
9.2 % 9.2 %
3.5 %
3.0 %
5.1 %
Services
10.5 % 9.8 %
8.2 %
7.8 %
8.0 %
GDP
8.6 % 9.3 %
6.2 %
5.0 %
6.5 %
Source : Central Statistics Office, RBI
Shares of various sectors of the economy in
the GDP
Sector
2009 - 10 2010 - 11 2011 - 12 2012 - 13
Agriculture
14.6 %
14.5 %
14.1 %
13.7 %
Industry
28.3 %
28.2 %
27.5 %
27.0 %
Services
57.1 %
57.3 %
58. 4%
59.3 %
Source : Central Statistics Office, RBI
Inflation Rate
Year
2010 - 11
2011 - 12
2012 - 13
Wholesale
Price Index
(WPI)
9.6
8.9
7.6
Consumer
Price Index
(CPI)
10.4
(Jan - '13)
8.4
10.0
(Jan - '13)
Savings Rate
Gross Domestic Savings as a %
of GDP
2009 - 10 2010 - 11 2011 - 12
33.7
34
30.8
Trends in global stock markets
% change during the year
Country
Index
2008
2009
2010
2011
2012
2013 *
India
Nifty
-51.8
71.5
17.3
-24.9
27.3
-1.7
USA
Dow Jones
-32.7
15.4
9.4
4.7
5.7
3.8
Japan
Nikkei
-39.7
16.6
-4.0
-18.7
21.4
5.8
UK
FTSE
-30.9
18.7
7.3
-7.3
3.5
6.1
China
Shanghai
-65.4
74.2
-13.4
-22.9
4.6
2.1
Brazil
Bo
-40.2
70.4
-1.1
-18.9
5.4
-10.2
* for the period from January 1 to February - 2013
UNION BUDGET - 2013 - 14
Foreign Exchange Reserve, FDI & FII Flows
Avg.
exchange
rate (Rs.)
FDI
$ Million
FII
$ Million
Forex
Reserves
$ Billion
Source : indiabudget.nic.in
2009 - 10
2010 - 11
47.44
45.56
2011 - 12 2012 - 13
47.92
54.5
Till Jan-'13
37,745
32,901
32,955
22,158
Till Dec'12
32,376
31,471
17,171
15,629
Till Dec'12
279.1
304.8
294.4
295.5
At Jan. end
Foreign Trade
Current Account Deficit
Year
2011 - 12
2012 - 13
2013 - 14
Estimated
Estimated
In US $ Billion
78.2
75
75
As a % of GDP
4.2 %
4.0 %
4.0 %
Oil, Coal, Gold - Major drain on Forex
Source : pmindia.gov.in & FM Speech
Fiscal Deficit
2009 - 10 2010 - 11 2011 - 12 2012 - 13 2013 - 14
6.5%
4.8%
5.7%
5.2%
4.8%
Defence outlay
 Defence budget total size :
Rs. 2,03,000 crore.
 Capital outlay for modernization of
equipment : Rs. 86,740 crore.
 Revenue outlay for pay and
allowances and related expenses :
Rs. 1,16,931 crore.
 What the armed forces had to
return : around Rs. 14,900 crore
Some Important Announcements
Provision for GST Rs. 9,000 Crores
Some Important Announcements
Investment Allowance
Inflation - Indexed Bonds
A tax break given to companies for
investment of Rs. 100 Cr. and above in
plant and machinery and is over and
above depreciation benefits enjoyed by
them.
These bonds are aimed at helping
savers protect the principal and
interest their investments.
The
principal rises with higher inflation.
Thrust on PPP in Coal Big Push for Highway
Mining, Policy Soon
Sector
Public Private Partnership to help
boost supply of coal to power
producers and other consumers.
Government to award contracts for
3,000 km roads by September and set
up a regulator for the sector.
Some Important Announcements
Dividend Distribution Tax on Mutual Fund
Name
Liquid
Debt
Equity
Individual / HUF
Upto 31st May 2013
From 1st June 2013
27.038 %
13.519 %
NIL
28.325 %
28.325 %
NIL
Some Important Announcements
Securities Transaction Tax
Nature of Transaction
Payable
Upton 31st May
2013
From 1st June
2013
Sale of a unit of an equity
oriented fund to the mutual fund
On Redemption
0.25 %
0.001 %
Delivery based purchase of units
of an equity oriented fund
entered into in a recognized stock
exchange
By Purchaser
0.10 %
NIL
Delivery based sale of units of an
equity oriented fund entered into
in a recognized stock exchange
By Seller
0.10 %
0.001 %
Sale of futures in securities
By Seller
0.017 %
0.01 %
Some Important Announcements
 Condition for Rajiv Gandhi Equity Scheme
relaxed, a bit.
 Infrastructure Tax Free Bonds for Rs.
50,000 corers to be issued in 2013 - 14.
 MSME's Non Tax Benefits to stay for 3
years.
Income Tax
 Rebate of Rs. 2,000/= for individual having
Total income upto Rs. 5 lakhs.
 Additional deduction for interest on
borrowing loan Sec 80 EE - Virtually no
benefit.
 Surcharge @ 10% on Individual / HUF's
having admitted income above Rs. 1
crore.
Income Tax
Historically, lower tax rates have yielded higher tax revenue !
1991 92
1993 94
1997 98
Rs.
22,000
Rs.
30,000
Rs.
40,000
50 %
40 %
30 %
Income limit for
maximum tax
1 Lakh
1 Lakh
Income
Collection
Rs.
6,731
Cr.
Rs.
9,123
Cr.
Personal
Exemption Limit
Maximum
Rate
Tax
Tax
2005 06
2010 11
2012 13
Rs.
Rs.
Rs.
Rs.
1,00,000 1,50,000 1,60,000 2,00,000
30 %
1.5 Lakh 2.5 Lakh
Rs.
20,235
Cr.
2008 09
Rs.
57,308
Cr.
30 %
30 %
30 %
5 Lakh
8 Lakh
10 Lakh
Rs.
Rs.
Rs.
1,06,046 1,39,069 1,89,866
Cr.
Cr.
Cr.
Income Tax
We are fortunate...
Unfortunately, we do not get in return the worth of
the taxes paid.
Income Tax
 TDS on transfer of Immovable property Rs. 50
Lac and above. Does not apply to agricultural
lands. Dropped last year again reintroduced.
 Wealth Tax Returns also to be filed
electronically.
 Keyman Insurance Policy even after assignment
shall continue to be Keyman Insurance only.
Effective on policies after 1st April 2014.
Income Tax
 Transfer of immovable property below stamp
duty valuation. The principle of Sec 50C (Capital
Gains) made applicable to Stock in trade also
under new Sec 43CA.
 Transfer of Immovable property below stamp duty
value, difference above Rs. 50,000/= shall be
deemed income of the buyer under Sec. 56.
 Return filed without payment of taxes shall be
considered as a defective return.
Income Tax
Definition of Capital Assets in regard to Agricultural Land
changed.
Existing
:
Proposed :
Land situated beyond 8 kms from limits of
town / city with a population of 10000 and
above, not considered as capital asset.
Population Range
10000 to 1 lakh
1 lakh to 10 lakh
10 lakh and above
Distance
2 kms
6 kms
8 kms
Shortest distance - Aerial distance shall be considered.
Income Tax
Some Amusing Facts...
 There are just 3.5 corers Income Tax Payers in
the country, which is just 2.5% of the total
population
 44% of the Income Tax Payers pay Rs. 1,000/=
or less Income Tax.
 89% Income Tax Payers contribute just 11% of
the total tax collected.
 33% of total Income Tax is collected from
Mumbai.
Indirect Taxes
 Presently all the offenses under Customs Act /
Central Excise Act & Service Tax Act are bailable.
Draconian provision to make arrest unbailable if
default exceeds a certain amount.
 Amnesty Scheme for Service Tax assesses.
Expections
We should all look at the budget
this way...
Honestly, I have never expected anything from any
budget ! My perspective is simply that, as a manager
it's not my prerogative to dwell ON the system. My
responsibility is to deliver IN the system by ensuring
that, for the same external conditions, Bajaj does
better than its comptition.
Rajiv Bajaj - Managing Director Bajaj Auto Ltd.
Thank you...