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CONTENT
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HIGHLIGHTS
A. INCOME TAX .... B. SERVICE TAX..... C. CENTRAL EXCISE .. D. CUSTOMS ... 01-12 13-15 16-19 20-21

ANALYSIS OF BUDGET, 2013

A. INCOME TAX . B. SERVICE TAX .. 22-48 49-55

3 4 5 6 7 8 9 10 11 12

MAJOR SECTORIAL IMPACTS.. ECONOMIC SURVEY HIGHLIGHTS .. KEY FEATURES OF BUDGET, 2013-2014.. MICRO ECONOMIC VIEW BUDGET AT GLANCE GRAPH SHOWING SOURCES AND APPLICATION OF RUPEE STATEMENT OF REVENUE FOREGONE ANALYSIS OF TAX AND NON-TAX REVENUE RECEIPTS TRENDS IN EXPENDITURE .. DEBT POSITION OF THE GOVERNMENT OF INDIA

56-60 61-63 64-74 75 76-79 81 82 83 84 85

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HIGHLIGHTS-INCOME TAX
FINANCE BI LL, 2013 Change in Ba sic Ta x Rates: Basic exemption limit for super senior citizen, senior citizen and others continues to be same at Rs. 5,00,000/-, 2,50,000/and

2,00,000/- respectively. However, tax rebate of Rs. 2,000/- or tax payable, whichever is less, will be given to the individuals having total income upto Rs. 5,00,000/-. Consequently any individual having income upto Rs. 2,20,000/- will not b e required to pay any tax. There is no change in tax rate of company, firm, AOP, BOI , Cooperative society, local authority and artificial juridical person except surcharge. Change in Surcha rge:
Par ti cul ar s Ind i vid ual / H UF / AO P / BO I/ C o -o per ati v e s o ci et y/ Fir m / L o cal a uth or i t y/ Ar ti fi cia l j ur id ic al per s on H a vi n g t ot a l i n c o me exc ee di n g R s . 1 c r o r e H a vi n g t ot a l i n c om e exc e edi n g Rs . 1 c r or e b ut l es s t h a n 1 0 c r or e H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re H a vi n g t ot a l i n c om e exc e edi n g Rs . 1 c r or e b ut l es s t h a n 1 0 c r or e H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re Ni l 5% 5% 2% 2% 10 % 5% 10 % 2% 5% Do m es ti c C om pan y E xis t ing Rat e Pr op os e d Rat e

For eig n C o mp an y

The above rates of surcharge will also be applicable for MAT, AMT, DDT & I DT provisions. Applicability of Surcharge on TDS p rov isions:
P ar ti cu lar s N on R es i de nt O t her t han C om pan y - H a vi n g t ot a l i n c o me exc ee di n g R s . 1 c r o r e For eig n C o mp an y H a vi n g t ot a l i n c o m e exc ee di n g R s .1 C ro re b ut l e s s t h a n 10 Cr o re s H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re 2% 5% 10 % Pr op os e d Rat e

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Education Cess: No change in 2% Education Cess and 1% Secondar y and Higher Education Cess. Definit ions: Agricultura l Income and Agricultural Land [Section 2(1A)(c)(ii)(B) and Section 2(14)] I t is proposed to amend the definition of capital asset so as to include agricultural land situated in any area within two kilometers from the local limits of any municipality or cantonment board and which has a population of more than ten thousand but not e xceeding one lakh; or within six kilometers from the local limits of any municipality or cantonment board and which has a population of more than one lakh but not exceeding ten lakh; or within eight kilome ters from the local limits of any municipality or cantonment board and which has a population of more than ten lakh, and accordingly, i f the same is trans ferred then provisions of capital gain would be attracted. Similarly, i ncome derived from any building on or in the immedi ate vicinity of the above mentioned l and will not be considered as agri cultural income. (w.e.f. A. Y. 2014-2015) Exemptions : Life Insurance Policy [Section 10(10D)] Any sum including the sum allocated by way of bonus received under an insurance policy issued on or after 01.04.2013 for the insurance on the life of any person who is a person with disability or a person with severe disability as referred to in section 80U, or

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suffering from disease or ailment as specified in the rules made under section 80DDB, shall be exempt if the premium payable for any of the years during the term of the p olicy does not exceed 15% (earlier 10%) of the actual capital sum assured. (w.e.f. A. Y.2014-2015) Keyman I nsura nce Policy [(Section 10(10D)] Any keyman insurance policy which has been assigned to a person during its ter m with or without consideration shall be taxable in the hands of assignee at the time of its maturity. (w.e.f. A. Y.2014-2015) Income of securit ization t rust f rom the activity of securitization [(Section 10(23DA)] Any income of sec uritization trust from the activity of securitization is exempt from ta x. (w.e.f. A. Y.2014-2015) Income 10(23ED)] Any income by way of contributions received from a de pository of I nvestor Protection Fund set up in accordance with the regulations prescribed by SEBI will not be included while computing the total income of the fund. (w.e.f. A. Y.2014-2015) Definit ion of Venture Capital company, Vent ure Capital fund and Venture capital undertaking [(P roposed Explanation 1 to clause Section 10(23FB)] New definition has been provided for Ventur e Capital f rom depositary of Invest or Protection Fund [(Section

Company/Venture Capital Fund/Ve nture Capital Under taking. (w.e.f. A. Y.2014-2015)

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Income to sha reholder on account of Buyback of sha res [(Section 10(34A)] Any income arising to an assessee be ing a shareholder on account of buyback of shares of a company not being listed on recognized stock e xchange is exempt from ta x. (w.e.f. A. Y.2014-2015) Income by way of distributed income by any person from the Securitization T rust [(Section10(35A)] Any income of the investor received by way of distributed income from a securitization trus t is exempt fr om tax. (w.e.f. A. Y.2014-2015) Income of National Financial Holdings Compa ny Limited

[(Section10(49)] Any income of National Financial Holdings Company Limited, being a company set up by the Central Government is exempt from tax. (w.e.f. A. Y.2014-2015) Business Income: Deduction for investment in new plant & machinery (Sect ion 32AC) I ncentive proposed in the form of deduction to a c ompany is as follows:
As s es s e e eli gib le for ded uc ti on Bus i nes s C on dit io ns M ini mu m In ce nti v e / D edu ct io n In v es t me nt in ne w A . Y. 2 0 1 4 A . Y. 2 0 1 5 - 1 6 as s et 15 Ab o v e R s . 15 % o f t h e 15 % o f t h e 10 0 c r ore a c t ua l a c t ua l c o st of c o st of t h e n ew a ss et s n ew a ss et s a c q ui r ed fr o m a c q ui r ed 01- 04- 13 t o 3103- 15 a s red u c ed b y ded u c t i on c l a i m ed u n de r t h i s sec t i on i n A.Y .20 1 4- 1 5

C om p a n y M a n u fa c t ur e Ac q ui re s a n d of a n a rt i c l e i n st a l l s n ew or t h i n g a s set s a ft er 31- 03- 13 b ut b ef or e 01- 04- 15

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I f the company tr ansfers the ne w asset within a period of 5 years from the date of i ts installation, the amount of deducti on claimed under this section s hall be deemed to be the income of the previous year in which such new asset is trans ferred under the head Pr ofits and Gains of Business or Profession . However this restriction shall not apply in case of amalgamation or de-mergers. (w.e.f. A. Y.2014-2015) Amount elig ible as deduction as bad debts in case of banks (Section 36) I t is proposed to allow deduction in r espect of bad de bts actually written off in exce ss of the credit balance in the provision of bad and doubtful debts without any disti nction between p rovision for bad and doub tful debts provided on rural or other advances. (w.e.f. A. Y.2014-2015) Amount not allowed as deduction in ca se of State Government Undertakings (Sect ion 40) I t is proposed to provide that any amount paid by way of royalty, license fee, service fee, privilege fee, service charge etc or any amount appropriated, by the State Government undertaking to the State Government, shall not be allowed as deduction fr om business income of the S tate Government undertaking. (w.e.f. A. Y.2014-2015) Special Provision for full value of consideration for transfer of asset other than capital asset s in certain ca ses (Section 43CA) The provisions of Section 50C is applicable to immovable property held as capital asset and not to immovable property held as stock in trade. I t is proposed u/s 43C A to make provisions of Section 50C

applicable on transfer of immovable property held as stock in trade . The stamp duty value to be adopted for the same will be the s tamp duty value as on the date of agree ment for transfer and not as on the date of registration of such tr ansfer provided consideration received before or on the date of agreement of transfer is by way of

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any mode other than cash. (w.e.f. A. Y.2014-2015) Income f rom other sources Deemed I ncome in the hands of p urcha ser (individual & HUF) of immovable p ropert y (Section 56)
Typ e o f pr op er t y C ons id er at io n Val ue of t a xab le In c om e u /s 5 6 i n the h ands of p ur c has er ( In di vi dua l & H UF) Th e st a mp p ro p e rt y . d ut y va l ue of s uc h

I mmo va b l e Pr op ert y

W i t h o ut C on si d era t i o n (a n d st a mp duty va l ue of p r op er t y exc ee ds Rs . 50 ,0 00 /- )

( St a m p D ut y Va l u e t o b e a d op t ed i s t h e va l u e a s on t h e da t e of a gr eem en t f o r t ra n s f er a n d n ot a s on t h e da t e of re gi st ra t i on of s uc h t ra n sf er p r o vi ded c o n si de ra t i on rec ei ved b ef o re or on t h e da t e of a gr eem en t of t ra n sf er i s b y wa y of a n y m o de ot h er t h a n c a sh ). St a mp d ut y va l u e o f s u c h p r op ert y a s exc ee d s s uc h c on si d era t i on . ( St a m p D ut y Va l u e t o b e a d op t ed i s t h e va l u e a s on t h e da t e of a gr eem en t f o r t ra n s f er a n d n ot a s on t h e da t e of re gi st ra t i on of s uc h t ra n sf er p r o vi ded c o n si de ra t i on rec ei ved b ef o re or on t h e da t e of a gr eem en t of t ra n sf er i s b y wa y of a n y m o de ot h er t h a n c a sh . )

I mmo va b l e Pr op ert y

F or a C o n si de ra t i o n l es s t h a n t h e st a m p dut y va l u e o f t h e p ro p e rt y by an a m o un t exc ee di n g R s 50 ,00 0 /-

(w.e.f. A. Y.2014-2015) Deduction u/s. 80C The amount of deduction for payment of Life I nsurance premium other than deferred annuity plan shall be allowable upto 15% (presentl y 10%) of the actual sum assured on policies issued after 01-04- 2013; in case of following persons
-

a person with disability or a person with severe disability as referred to in section 80U,

suffering from dise ase or ailment as specified in the rules made under section 80DDB. (w.e.f. A. Y.2014-2015)

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Rajiv Gandhi Equity Saving Scheme u/s. 80CCG The incentive available for investment in capital markets by the new retail investors under RGESS shall also be available in case of

investment in liste d units of an equity oriented fund. Further, the said deduction shall b e available for 3 consecutive assessment years as against the present provisions of 1 year. The deduction earlier allowable in case of gross total income upto Rs 10 lakhs is proposed to amended to be allowed in case of gross total income upto Rs 12 l akhs. (w.e.f. A. Y.2014-2015) Amendment of Section 80D in respect of Health Insurance premia Any payment or contribution made by the assessee to Health schemes as may be notified by the Central Government shall also be available u/s 80D, subject to overall monetary limit. (w.e.f. A. Y.2014-2015) Deduction in resp ect of interest on loan taken for residential house property A new section 80EE has been proposed to be introduced to provide that in computing the total income of an individual, interest payable on loan taken by him from any financial institution for the purpose of acquisition of a residential house property shall be deducted subject to following conditions The deduc tion shall not e xceed one lakh rupees , I n a case where the interest payable for the previous year is less than one lakh rupees, the balance amount shall be allowed in the assessment year be ginning on 1s t April , 2015, The loan should be sanctioned by the financial institution during the period beginning on 1st April, 2013 and ending on 31s t March, 2014, The amount of loan sanctioned for acquisition of the residential house property does not e xceed twe nty-five lakh rupee s, The value of the r esidential house p roperty does not exceed forty lakh rupees,
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The assessee does not own any resi dential house property on the date of sancti on of the loan. Where a deduction under this section is allowed for any assessment year, in respect of interest on housing loan, deduction shall not be allowed in respect of such interest under any other provisions of the I ncome-tax Act for the same or any other assessment year. Presently deduction in respect of interest on home loan is allowable u/s. 24(b ) subject to maximum of Rs. 1,50,000/-. However, the condition of first house or value of the house or amount of loan is not prescribed under this section. (w.e.f. A. Y.2014-2015) Deductions for contribution made to National Child ren s Fund Deduction u/s . 80G of donation made to National Childrens Fund shall be allowed at 100% as against present deduction of 50%. (w.e.f. A. Y.2014-2015) Contribution made to political parties or an electoral trust Contribution made to political parties or an electoral trust by any assessee, except a local authority and every artificial juridical person shall not be allowable as deduction u/s. 80GGB / 80GGC if the contribution is made in cash. Deduction under Section 80IA to power sector With a view to provide further time to the undertakings to commence the eligible activity, sunset date under section 80I A for the power sector to avail the tax incentive, is proposed to be extended by a further period of one year i.e . up to 31st March, 2014. Deduction under Section 80JJAA The tax incentive under section 80JJAA equal to thirty per cent of additional wages paid to the ne w regular workmen shall hence forth be allowable only on employment of pe rsons employed in factories and not to other employees. I t is also proposed that the deduction shall not be available if the factory is hived off or transferred from another existing entity or acquired by the assessee company as a result of amalgamation with another company.
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(w.e.f. A.Y.2014-2015 )

(w.e.f. A.Y.2014-2015 )

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Tax Credit U/s 87A With a view to provide tax relief to the resident individual tax payers having income above Rs. 2,00,000 but not exceeding Rs . 5,00,000/- shall get a tax relief of Rs. 2000/The rebate shall be equal to the amount of income-tax payable on the total income for any assessment year or an amount of two thousand rupees, whichever is less. (w.e.f. A. Y.2014-2015) Clarificatory & Other Amendment s I t is clarified that submission of a ta x residency certificate (TRC ) is necessary but submission of the TRC would not be a sufficient condition for claiming benefits under the agreements re ferred to in sections 90 and 90A. (w.e.f. A. Y.2014-2015) I t is proposed to amend section 115A to provide that inc ome earned by non-resident ta xpayer by way of royalty and fees for technical services be increased from 10% to 25%. (w.e.f. A. Y. 2014-2015) Beneficial provisions of section 115B BD of I ncome-tax Act providing for taxation of from gross a dividends @ 15% received company (in by an I ndian which it has

company

specified

foreign

shareholding of 26% or more ) if such dividend is included in the total income of the I ndian company, is proposed to be e xte nded for one more year, i.e . the same would be ap plicable for A.Y. 2014-15 also. I t is proposed to amend section 115-O in order to remove cascading effect whereby the tax on dividends received from the foreign subsidiary (i .e. the foreign company in which domestic company holds more than 50% of equity share capital) is payable under section 115BBD by the holding domestic company then, any

dividend distributed by the holding company in the s ame year, to the extent of suc h dividends, shall not be subject to Dividend Distribution Tax under section 115-O of the I ncome-tax Ac t.

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(w.e.f. 1 s t June, 2013) I t is proposed to insert a new section 115QA to provide that any distribution of income to a shareholder by a domestic unlisted company on buy- back of shares shall be chargeable to additional income-tax @20% on the distributed income, i .e. consideration paid by the company on buy-back of shar es as reduced by the amount received by the company for issuance of such shares. Such receipt would be exemp t i n the hands of shar eholders. (w.e.f. 1 s t June, 2013) I t is proposed to amend section 115R to provide uniform taxation for all types of funds , other than equity oriented fund, by increasing rate of tax on dis tributed income fr om 12.5% to 25% in all cases where distribution is made to an individual or a HUF. Further, in respect of income distributed by a Mutual Fund under an

I nfrastructure Debt Fund (I DF ) scheme to a non-resident I nvestor is proposed to be ta xed @ 5%. (w.e.f. 1 s t June, 2013) I t is proposed to insert Chapter XI I -EA consisting of sections 115TA, 115TB and 115TC to provide a special tax regime in respect of taxation of income & distribution of income of securitisation entities, set up as a trus t fr om the activity of securitization. (w.e.f. 1 s t June, 2013) Rate of ta x of Securities Transaction Tax (S TT) is proposed to be reduced and new provisions related to Commodities Transaction Tax (CTT) is proposed to be inserted on s ale of commodi ty derivatives, other than agri cultural commodi ties, traded in recognised

associations. (w.e.f. A. Y. 2014-2015) Genera l Anti Avoid ance Rules Provisions of G AAR in Chapter X- A and Section 144B A is p roposed to be modified replacing old provisions. (w.e.f. 1 s t Apri l 2016)

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Application of seized asset s under section 132B The assets seized during the course of search or requisition pursuant to search may be adjusted against the existing liability which has been due on account of assessments pursuant to search but not against the advance tax liability payable by the assessee. (w.e .f. 1 s t June , 2013) Defective return u/s. 139(9) Where the return is filed without payment of self assessment ta x along with the interest, the return shall be treated as a defective return by assessing officer. (w.e .f. 1 s t June , 2013) Direction for special audit u/s. 142 (2A) and exclusion of time in computing the period of limitation for completion of assessments and reassessment s The reasons for whi ch the Assessing Officer may direct special audit of accounts of the assessee is elaborately explained by the words the nature and complexity of the accounts, volume of the

accounts, doubts about the correctne ss of the accounts, multiplicity of transactions in the accounts or s pecialised nature of business activity of the assessee. Where the Assessing Officer directs for special audit u/s. 142(2A), and whereas such direction is challenged before a court, e nding with the date on which the order s etting aside such direction is received by the Commissioner, shall be excluded in computing the period of limitation for the purposes of section 153. (w.e .f. 1st June, 2013) Clarification of the phrase tax due for the purposes of recovery in certain ca ses Section 167C and S ection 179 pr ovides that where the ta x due fr om LLP or a private company as the case may be is irrecoverable from such LLP or company, then the partner/ director shall be jointly and severally liable for payment of such tax. An explanation has been inserted to widen the definition of ta x due so as to cover penalty, interest and other sum payable under the Act. (w.e .f. 1st June, 2013)
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Provisions pertaining to TDS: Under proposed new section 194I A, Tax at the rate of 1% to be deducted by the purchaser of immovable property (other than agricultural land) from the payment made to seller where

consideration is Rs . 50 lacs or more .

(w.e.f. 1st June, 2013).

Proposed to amend section 194LC to provide that where a nonresident utilize the money deposited i n designated bank account for subscription to a l ong-term infras tructure bond issue of an I ndian company, then, the borrowing by the company shall be deemed to be in foreign currency & concessional rate of 5% TDS would be applicable. (w.e.f. 1 s t June, 2013).

Penalty for non-filling Annua l Informat ion Return (AIR): I t is proposed to provide in u/s. 271FA that where a person fails to furnish the return within the period specified in the notice u/s 285B A(5), shall pay a sum of Rs. 500/- instead of Rs. 100/- for every day during which the failure continues by way of penalty from the date of e xpiry of p eriod mentioned in the notice (w.e .f. 1st April, 2014).

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HIGHLIGHTS-SERVICE TAX
All changes will come in to effect on enactment of Finance Bill, 2013 unless stated other wise. No change in Rate of Service Tax Following amendments are proposed to be made in the Finance Act, 1994: (a) Proposed to change the definition of Approved Vocational

Education Course [Sec. 65B (11)] to include courses run by an industrial training institute/ centre affiliated to State Council along with National Council for Vocational Training to delete clause (i ii) dealing with courses run by an institute affiliated to the National Skill Development Corporation. (b ) Proposed to expand the definition of process amounting to manufacture or pr oduction of goods [Sec. 65B (40)] to include processes under the Medicinal and Toilet Preparations (Excise Duties ) Ac t, 1955 (c ) Proposed to delete the word Seed u/s. 66D(d)(i ) to allow the benefit of non applicability of service tax to all other testing in relation to agriculture or agricultural produce (d) Proposed to insert new section 73(2A) that I f a demand of Service Tax made under extended period of limitation is found to be unsustainable by the Appellate authority/Tribunal/Court on

grounds of limitati on the ta x liability for eighteen months (normal period of limitation) may be computed (e ) Proposed to substi tute section 77(1)(a) to restrict the maximum penalty to Rs. 10,000/- for failure to ob tain registration. (f) Proposed to insert new section 78A in order to impose p enalty on directors & officials of company for specified offences in cases of willful actions.

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(g) Proposed to amend section 86(5) to empower Appellate Tribunal to exte nd operation of stay for a per iod of 185 days where the delay is not attributable to the assess ee. The stay order , however, will stand vacated at the e nd of 365 days from the date of the order. (h) Proposed to amend section 89 and to insert new section 90 to prescribe revised punishments for offences, make certain

offences cognizabl e/non cognizable & bailable. (i ) Proposed to inse rt new section 91 to provide power to

commissioner to arr est a person for specified offences. (j ) Proposed to insert new section 99 to provide retrospective

exemption to the I ndian Railways on the service tax leviable on various taxable services provided. Following amendments are notified: (a) Abate ment for c onstruction of a complex, building, civil

structures etc. is being reduced from the existing 75% to 70% for construction other than residential unit having a carpet area up to 2,000 sq ft or where the amount charged is less than Rs 1 cr. (Effective rate of S T is 3.708%) (w.e .f 1 s t March, 2013) (vide notification no. 2/2013 S T) (b ) Review of Exemptions The following exemptions are being withdrawn: Services provided by an educational institution by way of auxiliary property. Temporary transfer or permitting the use or enjoyment of a copyright relating to cinematographic films other than educational services or renting of immovable

exhibition of cinematograph films in a cinema hall or a cinema theatre. Services by way of vehicle parking to general public.

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Services provided to Government, a local authority or a governmental authority, by way of repair or maintenance of aircraft. The following exemptions are streamlined / rationalized: Exemption limit of Rs. 25 lacs for charitable organizations, providing service towards any other object of general public utility would not be available. Service tax will b e leviable on taxable service provided in restaurants with ai r-conditioning or central air heating i n any part of the estab lishment at any time during the year by omitting condition regarding license to serve liquor. Exemption to transport of goods b y road and rail/vessel is rationalized. (w.e .f 1 s t April, 2013) (vide notification no. 3/2013 S T) Advance Ruling [u/s. 96A(b )(iii)] Scope of advance ruling is being extended to cover resident public limited companies. (w.e .f 1 s t March, 2013) (vide notification no. 4/2013 S T) Service (VCES ): To encourage voluntary compliance and broaden the tax base , it is proposed to provide one time amnes ty b y way of (i ) waiver of interest and penalty; and (ii ) immunity from pros ecution, to stop filers, non-fi lers or non-registrants or service providers (who have not disclosed true liability in the returns filed by them during the period from October 2007 to December 2012) who pay the "tax dues". Tax Voluntary Compliance encouragement Scheme, 2013

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HIGHLIGHTS - CENTRAL EXCISE

Following are the highlights of impor tant amendments made in the Ce ntral Excise Act, 1944 through the Finance Bill, 2013 and Central Excise

Notifications. All changes come into effect im mediat ely unless ot herwise

specified. No change in the b asic rate of excise duty. First Schedule is being amended to substitute the existing tariff rates for various lengths of cigarettes and cigars of heading 2402 with the enhanced rates . Excise duty is being increase onSport Utilities Ve hicles except SUVs use d as taxis from 27% to 30%. Compounded levy on stainless steel "Patta Patti" from Rs 30,000 per machine per month to Rs 40,000 per machine per month. mobile phones with retail sale price exceeding Rs 2000/- from 1% to 6% cigarettes except cigarettes of length not exceeding 65 mm, cigars and cigarillos has b een increased to about 18%. marble tiles and slabs from Rs 30 per s q. mtr to Rs 60 per sq. mtr .

Excise duty is being reduced ontruck chassis (8706 00 42) fr om 14% to 13%.

Full exemption from excise duty has been provided in the following cases: Hand made carpets and carpets and other textile floor coverings of coir or jute, whether or not handmade I ntermediate goods manufactured and consumed captively by

exempted uni ts under Area Based Exemption Scheme i n Himachal Pradesh and Uttarakhand.

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tapioca sago (sabudana) and tapioca starch manufactured and consumed captively in the manufacture of tapioca sago. henna p owder or p aste, not mixed with any other ingredient. ships and other vessels. Henceforth, no C VD on these ships and vessels when impor ted. Excise duty of 4% is being levied on silver manufactured from zinc/lead smelting. I t is being clarified that the item "trimmed or untrimmed sheets or circles of copper intended for use in the manufacture of handicrafts or utensils" presently l eviable to excise duty at Rs . 3500 per MT includes copper and coppe r alloys including brass. 'Zero excise duty r oute', as existed prior to Budget 2011-12, is being restored in respect of branded readymade garments and made ups. I n the case of cotton there will be zero duty at the fibre stage and, in the case of spun yarn of man made fibre s, there will be a duty of 12% at the fibre stage. The 'Zero excise duty route' will be in addition to the CENVAT r oute now available. MRP based assessment with abatement of 35% from MRP applied to Branded Ayurvedic medicaments and medicaments of Unani, Siddha, Homeopathic or bi o-chemic system. Section 9 pertai ning to punishment with term of imprisonment

extending to seven years along with fi ne has been liberalised to apply in cases where the evasion of duty leviable exceeds Rs 50 lakhs as against the present limit of Rs 30 lakhs . Section 9A is being amended to propose that where the duty liability exceeds Rs. 50 lakh, the offence for evasion of such duty shall be cognizable and non-bailable and punishable under clause (b ) or clause (bbbb) of s ub-section (1) of s ection 9 b y way of imprisonment upto seven years al ong with fine . Section 11 is being amended so as to provide for recovery of mone y due to the Government from any person other than from whom money is due after giving a proper notice, if that other person holds mone y for or on account of the first person.
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The person to whom such notice has been issued is bound to comply with the same and in case of non-compliance; he shall face all the consequences under this Ac t. Section 11A is being amended to provide that subsequent to issue of notice under this section if the officer provides a statement containing details of duty not paid, short levied or erroneously refunded, the same shall be deemed to be a service of notice. Reference to sub-section (1) in section 11DDA is being omitted. A person who is forwarded to a police office under section 20 may be admitted for bail before magistrate only to offence which is noncognizable. Section 21 is being amended so as to make the provisions regarding release of arrested person on bail or personal bond applicable only to offence which is non-cognizable. Definition of activity in Section 23A pertaining to advance ruling is proposed to be substituted b y the foll owing definition: Ac tivity means production or manufacture of goods and includes any new business of production or manufacture proposed to be undertaken by the e xisting producer or manufacturer, as the case may be ; Earlier, definition was restricted to Activity means production or manufacture of goods. Section 23C pertaining to questions which may be referred for advance ruling has been proposed to be ame nded to include admissibility of credit of service tax paid or deemed to have been paid on input service or excise duty. Section 35C is proposed to be amended to entitle the assessee to make an application to the Tribunal for extending the stay for a further period of 185 days where the delay in disposing the appeal is not attributable to any reason on the par t of the assessee and on expiry of such further extensi on of stay if the ap peal is being not disposed off the stay shall stand vacated. These provisions are made at par with the provision under the I ncome Tax Ac t.

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Section 37C is being amended to specify additional modes of delivery of specified documents i .e. by spe ed post with proof of delivery or through courier ap proved by the Central Board of Excise & Customs .

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HIGHLIGHTS - CUSTOMS
No change in the b asic rate of Custom duty. BCD increased on certain products such as:
Des cr i pti on of G o ods
Cars/ Motor ve h i c l e s (i r r e s p e c t i ve of e n g i n e c a p a c i t y ) w i t h C I F va l u e > U S D 40000 Luxury Motor cycle with engine capacity of 8 0 0 c c o r mo r e

Pr es e nt R at e 75 %

Pr op os e d Ra te 10 0%

60 % 10 0% 5% 5% Ni l

75 % 12 5% 15 % 10 % 2%

Ol d c a rs Ra w Si l k Set T op b ox es St ea m c o a l

BCD reduced on certain products such as :

Des cr i pti on of G o ods Sp ec i fi ed t ext i l e m a c h i n e r y a n d p a rt s t h ere o f Sp ec i fi ed ma c h i n e r y f or u se i n t h e l ea t h er i n d u st r y o r f o ot w ea r i n d u st r y Pr e- f or m s o f p r ec i o u s a n d s emi - p r ec i o us st on e s B i t umi n o u s c oa l Pr es e nt R at e 7 .5 % 7 .5 % 10 % 5% Pr op os e d Ra te 5% 5% 2% 2%

Export duty introduced on the following goods:

Des cr i pti on of G o ods Ra w s ug a r , w h i t e or r efi n ed s u ga r B a u xi t e I l men i t e : - Pr oc es s ed - Un p r oc e s se d Ef f ec ti v e Ra te Ni l 10 % 10 % 5%

Baggage Rules Limit on duty free baggage allowance of Jewellery enhanced

Des cr i pti on of G o ods E i t h er An I n di a n p a ss en g er , w h o h a s b een r esi di n g a b r oa d f o r ov er on e y ea r Or A p er s on w h o i s t r a n sf er ri n g h i s r esi den c e t o I n di a , G en t l em a n p a s se n g er La d y p a s sen ge r R s 10 ,00 0 R s 20 ,00 0 R s 50 ,00 0 R s 1 ,0 0 ,00 0 Pr es e nt lim it Pr op os e d lim it

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The C VD on steam coal is being raised from 1% to 2% while CVD on bituminous coal is being reduced from 6 % to 2 %. Exemption from BC D on lithium ion automotive battery for manufacture of lithium ion battery packs for suppl y to manufacturers of hybrid and electric vehicles. Clarification has been provided that LCD and LED TV Panels and LCD and LED TV Modul es are one and the same thing for the purpose of exemption under notification No 12/2012-Customs (S . No. 432) The validity period of exemption granted to identified parts of hybrid and electric vehicles is being extended by two more years up to 31st March, 2015.

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Analysis-INCOME TAX
Following is the analysis of the impor tant prop osals as recommended in the I ncome Tax Act, 1961 by the Finance Bill, 2013. CHANGE IN BASIC T AX RATES: Basic exemption limit for super senior citizen, senior citizen and others continues to be same at Rs. 5,00,000/-, 2,50,000/and

2,00,000/- respectively. However, tax rebate of Rs. 2,000/- or tax payable, whichever is less, will be given to the individuals having total income upto Rs. 5,00,000/-. Consequently individual having income upto 2,20,000/- will not required to pay any tax. I mpact of intr oduction of tax rebate on ta x savings of I ndividuals
Par ti cul ar s T ot a l I n c o me C ur re n t T a x (e x c l udi n g c es s ) Pr op o se d Ta x (e xc l u di n g c e s s ) Sa vi n g s i n Ta x 2 ,2 0 ,00 0 2 ,0 00 Ni l 2 ,0 00 A mo unt ( i n Rs .) 5 ,0 0 ,00 0 30 ,00 0 28 ,00 0 2 ,0 00 5 ,0 0 ,00 1 30 ,00 1 30 ,00 1 Ni l

There is no change in tax rate of company, firm, AOP, BOI , cooperative society, local authority and artificial juridical person except surcharge. CHANGE IN SURCHARGE: Following table me ntion the change in rates of surcharges.
Par ti cul ar s Ind i vid ual / H UF / AO P / BO I/ C o- op er a ti v e s oc ie ty /F ir m /L oc al a uth or it y / Ar ti fi ci al j ur i dic al per s on H a vi n g t ot a l i n c o me exc ee di n g R s . 1 c r o r e Ni l 10 % E xis t ing Rat e Pr op os e d Rat e

Do m es ti c C om pan y H a vi n g t ot a l i n c o me exc ee di n g Rs . 1 c r or e b ut l e ss t h a n 1 0 c r ore H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re 5% 5% 5% 10 %

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Par ti cul ar s For eig n C o mp an y H a vi n g t ot a l i n c o me exc ee di n g Rs . 1 c r or e b ut l e ss t h a n 1 0 c r ore H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re 2% 2% 2% 5% E xis t ing Rat e Pr op os e d Rat e

I mpact of introduction of New Surchar ge on companies tax rate is as under:

Par ti cul ar s Do m es ti c C om pan y H a vi n g t ot a l i n c o me n ot exc ee di n g R s . 1 c r ore H a vi n g t ot a l i n c o m e exc ee di n g R s . 1 c r ore b ut l es s t h a n 1 0 c r or e H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re H a vi n g t ot a l i n c o me n ot exc ee di n g R s . 1 c r ore H a vi n g t ot a l i n c o m e exc ee di n g R s . 1 c r ore b ut l es s t h a n 1 0 c r or e H a vi n g t ot a l i n c o me exc ee di n g R s . 1 0 c r o re 30 .90 % 32 .45 % 32 .45 % 41 .20 % 42 .02 % 42 .02 % 30 .90 % 32 .45 % 33 .99 % 41 .20 % 42 .02 % 43 .26 % E xis t ing Rat e Pr op os e d Rat e

For eig n C o mp an y

The proposed surc harge rates are also applicable for MAT, AMT, DDT & I DT provisions. I mpact of introduction of Ne w Surc harge on compani es effective rate of MAT is as fol lows:
Par ti cul ar s Do m es ti c C om pan y H a vi n g b o ok p r o fi t n ot e xc e edi n g R s . 1 c r or e H a vi n g b o ok p r ofi t e xc e edi n g Rs . 1 c r o re b ut l es s t h a n 1 0 c r ore H a vi n g b o ok p r o fi t e xc e edi n g R s . 10 c ro r e H a vi n g b o ok p r o fi t n ot e xc e edi n g R s . 1 c r or e H a vi n g b o ok p r ofi t e xc e edi n g Rs . 1 c r o re b ut l es s t h a n 1 0 c r ore H a vi n g b o ok p r o fi t e xc e edi n g R s . 10 c ro r e 19 .05 % 20 .01 % 20 .01 % 19 .05 % 19 .44 % 19 .44 % 19 .05 % 20 .01 % 20 .96 % 19 .05 % 19 .44 % 20 .01 % E xis t ing Rat e Pr op os e d Rat e

For eig n C o mp an y

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DEFINITIONS: Agricultura l Income and Agricultural Land [Section 2(1A)(c)(ii)(B) and Section 2(14)] I t is proposed to amend caluse (14) of Section 2 so as to amend the definition of capital asset to include therein agricultural land

situated in any are a within two kilometers from the local limits of any municipality or cantonment board and which has a population of more than ten thousand but not e xceeding one lakh; or within six kilometers from the local limits of any municipality or cantonment board and which has a population of more than one lakh but not exceeding ten lakh; or within eight kilome ters from the local limits of any municipality or cantonment board and which has a population of more than ten lakh, and accordingly, if the same is transferred then provisions of capital gain would be attr acted. Similarly, I t is proposed to amend ite m (B ) of clause (ii ) of proviso to sub clause (c ) of clause(1 A) of Section 2 so as to provide income derived from any building on or in the immediate vicinity of the above income. Consequential amendment has been made in the definition of urban land in The Wealth Tax Ac t, 1957. (w.e.f. A. Y.2014-2015) EXEMPTIONS: Life Insurance Policy [Section 10(10D)] I t is proposed to insert new proviso in sub clause (d) of clause (10D) so as to provide that any sum including the sum allocated by way of bonus received under an insurance policy issued on or after mentioned land will not be considered as agricultural

01.04.2013 for the insurance on the life of any person who is

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a person with disability or a person with severe disability as referred to in section 80U, or suffering from dise ase or ailment as specified in the rules made under section 80DDB, shall be exempt if the premium payable for any of the years during the term of the p olicy does not exceed 15% (earlier 10%) of the actual capital sum assured. Consequential amendment has been made in Section 80C in respect of deduction of pr emium paid on insurance policy not exceeding 15% of the capital sum assured in case of the person suffering from disability/disease mention in Section 80U and 80DDB res pectively. The above propos ed amendment is applicable in respect of policy issued on or after 01.04.2013 for insurance of the life of a person referred to herein above. (w.e.f. A. Y.2014-2015) Keyman I nsura nce Policy [(Section 10(10D)] I t is proposed to amend the Explanation to Sec. 10(10D) so as to provide that any keyman insurance policy which has been assigned to a person during its term with or without consideration shall be taxable in the hands of assignee at the time of its maturity The effect of the p roposed change is explained herein below under different situations through an exampl e i. X Ltd. takes keyman insurance policy in the name of its keyman Mr . Y. The premium is paid by X Ltd. and the maturity amount is also received by X Ltd.
Par ti cul ar s Ta x I mpa ct b e for e Pr op os e d A me nd me nt Ta x a b l e in h a n d s o f X Lt d . the Ta x I mpa ct a ft er Pr op os e d A m end m e nt

S um re c ei ve d i n c l u di n g b on us o n ma t u ri t y b y X Lt d .

Ta x a b l e i n t h e h a n ds of X Lt d .

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ii. X Ltd. takes keyman insurance policy in the name of its keyman Mr . Y. The premium is paid by X Ltd. Thereafter, the policy is assigned in the mid-term to Mr . Y without any

consideration. The reafter, Mr . Y pays the premium and on maturity of the p olicy, the matured amount is received by Mr . Y.
Par ti cul ar s Ta x I mpa ct b e for e Pr op os e d A me nd me nt **T a xa b l e in the hands of Mr. Y as p erq ui si t e . N ot t a xa b l e i n t h e hands of Mr. Y. Ta x I mpa ct a ft er Pr op os e d A m end m e nt **T a xa b l e i n t h e h a n ds of M r . Y a s p er q ui si t e . Ta x a b l e i n t h e h a n d s of M r . Y (t a x a b l e a m o un t = m a t u ri t y a m o un t S ur ren de r V a l ue a t t h e t i me of a ssi gn men t )

**S u r r en d er V a l u e a t the t i me of a s si gn men t S um re c ei ve d i n c l u di n g b on u s o n ma t u ri t y b y M r . Y

** There is no specific provision in the Income Tax Act for taxability on the s u r r e n d e r v a l u e o f t he p o l i c y a t t h e t i m e o f a s s i g n m e n t a n d h e n c e t he same remains a grey area.

iii.

X Ltd. takes keyman insurance policy in the name of its keyman Mr . Y. The premium is paid by X Ltd. Thereafter, the policy is assigned in the mid term to Mr. Y with conside ration (Surrender Value ). Thereafter, Mr. Y p ays the premium and on maturity of the p olicy, the matured amount is received by Mr . Y.
Par ti cul ar s Ta x I mpa ct b e for e Pr op os e d A me nd me nt **T a xa b l e in h a n d s o f X Lt d . the Ta x I mpa ct a ft er Pr op os e d A m end m e nt **T a xa b l e i n t h e h a n ds of X Lt d . Ta x a b l e i n t h e h a n ds of Mr. Y (t a xa b l e a m o un t = ma t uri t y a m o un t S u rr en d er Value paid by Mr. Y to X Lt d . a t t h e t i me of a s si gn men t )

**S u r r en d er V a l u e a t the t i me of a s si gn men t S um re c ei ve d i n c l u di n g b on u s o n ma t u ri t y b y M r . Y

N ot t a xa b l e i n t h e hands of Mr. Y.

** There is no specific provision in the Income Tax Act for taxability on the s u r r e n d e r v a l u e o f t he p o l i c y a t t h e t i m e o f a s s i g n m e n t a n d h e n c e t he same remains a grey area.

(w.e.f. A. Y.2014-2015)

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Income of securit ization t rust f rom the activity of securitization [(Section 10(23DA)] I t is proposed to insert new clause (23DA) to provide that any income of securitization trust fr om the activity of securitization is exempt from ta x. Further a new C hapter XI I -EA has bee n inserted for providing special tax regime , salient features of which are as follows: (i ) I n case of securitization vehicles which are set up as a trust and the activities of which are regulated by either SEBI or RBI , the income from the activity of securitization of such trusts will be exempt from ta xati on. (ii ) The securitization trust will be liable to pay additional i ncometax on income tax distributed levied in to the be its investors of on the line of The of

distribution additional

case

mutual @ 25%

funds. in c ase

income -tax

shall

levied

distribution being made to investors who are individual and HUF and @ 30% in other cases. No additional income tax s hall be payable if the inc ome distributed b y the securitization trust is received by a person who is e xempt fr om tax under the Act. (iii) Consequent to the levy of distribution ta x, the distributed income received by the investor will b e exempt from tax. (iv) The securitisation trust will be liable to pay interest @ 1 % for every month or part of the month for default in payment of additional income- tax ( Section 115TB ). (v ) Any person responsible for making payment of the income distributed by the securitisation trust and the securitisation trustdoes not pay the tax, then he or it shall be deemed to be an assessee in default in respect of amount of tax payable and all the provisions of the Act relating to recovery and collection of taxes s hall apply (Section 115TC ). (w.e.f. A. Y.2014-2015)

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Income 10(23ED)] Under the existing provisions, section 10(23EA) provides that income by way of contributions from a recognized stock exchange received by a I nvestor Protection Fund set up by the recognized stock exchange shall be exempt from ta xati on . On similar lines, it is proposed that income, by way of contribution from a depository, of the I nvestor Protection Fund set up by the depository in accordance with the regulations prescribed by SEBI will not be included while computing the total income subject to same conditions as are applicable in respect of exemption to an I nvestor Protection Fund set up b y recognized stock e xchanges. However, where any amount standing to the credit of the fund and not charged to inc ome-tax during any previous year is shared wholly or partly wi th a de pository, the amount so shared shall be deemed to be the income of the previous year in which suc h amount is shared. (w.e.f. A. Y.2014-2015) Definit ion of Venture Capital company, Vent ure Capital fund and Venture capital undertaking [(P roposed Explanation 1 to clause Section 10(23FB)] I t is proposed to substitute explanation to clause (23FB) so as to provide new definition for Ve ntur e Capital Company/Venture f rom depositary of Invest or Protection Fund [(Section

Capital Fund/Ve nture Capital Under taking. The said ame ndment is made to gi ve consequential effect post replacement of SEBI (Venture Capital Fund) Regulations , 1996 (VCF regulations) by The SEBI (Al ternative I nvestment Funds ) Regulations, 2012 (AI F regulations) from 21st May, 2012. I n order to pr ovide benefit of pass thr ough to similar venture capital funds as are registered under new regulations and subject to same conditions of investment restrictions in the context of investment in a venture capital undertaking , it is proposed to amend section 10(23FB ) to provide that

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(i ) The existing VCFs and VCCs (i .e . whi ch have been registered before 21/05/2012) and are regulate d by the VCF regul ations, as they stood befor e repeal by AI F regulations, would continue to avail pass through status as currently available. (ii ) In the conte xt of AI F regulations, the Venture Capital

Company shall be defined as a company and Venture capital fund shall be defined as a fund set up as a trust, whi ch has been granted a c ertificate of registr ation as Venture Capital Fund being a sub-category of Category I Al ternative

I nvestment Fund and satisfies the following conditions :(a) That at least two-thirds of its investible funds are invested in unlisted equity shares or equity linked instruments of venture capital undertaking. (b ) No investment has been made by such AI Fs in a VCU which is an associate company. (c ) Units of a trust se t up as AI F or shares of a company se t up as AI F, are not liste d on a recognized stock e xchange. (iii) In the conte xt of AI F regulations, the Venture Capital

Undertaking shall be defined as it is defined in the Alter native I nvestment Funds Regulations. (w.e.f. A. Y.2014-2015) Income to sha reholder on account of Buyback of sha res [(Section 10(34A)] I t is proposed to insert new clause (34A) so as to provide for exemption in respect of any income arising to an assessee being shareholder on account of buy back of shares (not being listed on a recognized stock e xchange ) b y the company. This amendment is consequential to i nsertion of new Chapter XI I -DA relating to special provisions for tax on distributed income of domestic company for buy back of shares. (w.e.f. A. Y.2014-2015)

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Income by way of distributed income by any person from the Securitization T rust [(Section10(35A)] I t is proposed to insert new clause (35 A) in Section 10 so as to provide for exemption in respect of any income received by investor by way of distributed income from a s ecuritization trus t. This amendme nt is consequential to i nsertion of new Chapter XI I -EA for providing special tax regime for tr ust carrying on the activity of securitization. (w.e.f. A. Y.2014-2015) Income of National Financial Holdings Compa ny Limited

[(Section10(49)] I t is proposed to insert new claus e (49) in Section 10 to grant exemption to National Financial Holdings Company Limited in

respect of its income accruing, arising or received on or before March 31, 2014. The said amendme nt is proposed to provide exemption on lines of SUUTI (The Specified Undertaking of Unit Trust of I ndia) to National Financial Holdings Company Limited incorporated on June 07, 2012 post wounding up of SUUTI (The Specified Undertaking of Unit Trust of I ndia) which was created vide Unit Trust of I ndia (transfer of Undertaking and Repeal Act) Act, 2002 as successor of Unit Trust Of I ndia. (w.e.f. A. Y.2014-2015)

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BUSINESS INCOME: Deduction for investment in new plant & machinery (Sect ion 32AC) I ncentive proposed in the form of deduction to a c ompany is as follows:
As s es s e e eli gib le for ded uc ti on Bus i nes s C on dit io ns M ini mu m In ce nti v e / D edu ct io n In v es t me nt in ne w A . Y. 2 0 1 4 A . Y. 2 0 1 5 - 1 6 as s et 15 Ab o v e R s . 15 % o f t h e 15 % o f t h e 10 0 c r ore a c t ua l a c t ua l c o st of c o st of t h e n ew a ss et s n ew a ss et s a c q ui r ed fr o m a c q ui r ed 01- 04- 13 t o 3103- 15 a s red u c ed b y ded u c t i on c l a i m ed u n de r t h i s sec t i on i n A.Y .20 1 4- 1 5

C om p a n y M a n u fa c t ur e Ac q ui re s a n d of a n a rt i c l e i n st a l l s n ew or t h i n g a s set s a ft er 31- 03- 13 b ut b ef or e 01- 04- 15 (M ea n i n g of n ew a ss et gi ve n b el ow )

The phrase ne w asset has been defined as new plant or machinery but does not include any plant or machinery which before its installation by the assessee was used either within or outside I ndia by any other person; any plant or mac hinery installed in any office premises or any residential accommodation, including accommodati on in the nature of a guest house; any office appliances including computers or computer software ; any vehicle; ship or aircraft; or any plant or machinery, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation or

otherwise ) in comp uting the income chargeable under the head Profits and gains of business or profes sion of any previous year . I f the company tr ansfers the ne w asset within a period of 5 years from the date of i ts installation, the amount of deducti on claimed
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under this section s hall be deemed to be the income of the previous year in which such new asset is trans ferred under the head Pr ofits and Gains of Business or Profession . Further, where the new asset is sold or otherwise tr ansferred in connection with the amalgamation or demerger within a period of five years from the date of its installation, the provisions of this section shall apply to the amalgamated company or the resulting company, as the c ase may be, as they would have ap plied to the amalgamating company or the demerged company. The effect of the p roposed change is explained herein below under different situations through an exampl e (Rs . in crores )
Particulars Situation 1 A.Y. 201415 Investment in new asset Deduction u/s 32AC @15% of cost Less : Deduction claimed in earlier year Available Deduction 99 A.Y. 201516 11 Situation 2 A.Y. 201415 110 A.Y. 201516 -Situation 3 A.Y. 201415 -A.Y. 201516 110 Situation 4 A.Y. 201415 105 A.Y. 201516 50

--

1 6 .5

1 6 .5

1 6 .5

--

1 6 .5

1 5 .7 5

2 3 .2 5

--

--

--

1 6 .5

--

--

--

1 5 .7 5

16.5

16.5

--

--

16.5

15.75

7.5

(w.e.f. A. Y.2014-2015) Amount elig ible as deduction as bad debts in case of banks (Section 36) I t is proposed to insert an Explanation 2 to clause (vii) of sub section (1) of Section 36 so as to allow deduction in respect of bad debts actually written off in excess of the credit balance in the provision of bad and doubtful debts without any distinction betwe en provision for bad and doub tful debts pr ovided on rural or other advances. (w.e.f. A. Y.2014-2015)

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Amount eligible as deduction of Commodities Transaction Tax

(Section 36) I t is proposed to amend section 36 of the I ncome-tax Act so as to provide that an amount equal to the Commodities Transaction Tax paid by the ass essee in respect of the ta xable commodi ties

transactions entered into in the course of his busines s during the previous year shall be allowable as deduction, if the income arising from such taxabl e commodi ties tr ansactions is included in the income computed under the head Profits and gains of business or profession. This amendment is consequential in line with levy of ne w tax called Commodities Trans action Tax on taxable commodities transactions entered into in a re cognized associati on. (w.e.f. A. Y.2014-2015) Amount not allowed as deduction in ca se of State Government Undertakings (Sect ion 40) I t is proposed to amend Section 40 s o as to provide that any amount paid by way of royalty, license fee, service fee, privilege fee, service charge etc or any amount appropriated, by the S tate Government undertaking to the State Government, s hall not be allowed as deduction undertaking. This amendment has been proposed to resolve disputes that have arisen in respect of income-tax assessment of some State from business income of the S tate Government

Government under takings as to whether any sum paid by way of privilege fee, license fee, r oyalty, etc. levied or charged by the State Government exclusively on its undertakings are deductible or not for the purpose s of computation of income of such undertakings. (w.e.f. A. Y.2014-2015) Special Provision for full value of consideration for transfer of asset other than capital asset s in certain ca ses (Section 43CA) The provisions of Section 50C is applicable to immovable property held as capital asset and not to immovable property held as stock in
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trade. I t is proposed u/s 43C A to make provisions of Section 50C

applicable on transfer of immovable property held as stock in trade . The stamp duty value to be adopted for the same will be the s tamp duty value as on the date of agree ment for transfer and not as on the date of registration of such tr ansfer provided consideration received before or on the date of agreement of transfer is by way of any mode other than cash. The effect of the p roposed change is explained herein below under different situations through an exampl e
Sit uat io ns Ta x I mpa ct b e for e Pr op os e d A m end m e nt sel l s Pr ovi si on s t h e s el l e r . Th e b et w een dut y sa l e s dee d tax the in is va l u e di f fer en c e the st a mp the sa l e to of the fr o m and in of S ec t i on Ta x I mpa ct a ft er Pr op os e d A m end m e nt Pr ovi si on s 50 C is t h e s el l e r . Th e b et w een dut y sa l e s va l u e di ff er en c e the st a mp the sale of t he and in of S ec t i on to

If

the

s ell er

i mm ov a b l e a

p r op ert y l es s

50 C i s a p p l i c a b l e t o

applicable

h el d a s c api tal as s e t a t c o n si de ra t i on t h a n t h e va l ue a s p er st a mp d ut y a ut h ori t i es

c on si d era t i on c h a r ge d h a n ds un de r

c o n si de ra t i on

men t i on e d the

men t i on e d in th e

dee d i s c har g ed t o t ax han ds fr om s ell er und er th e h e ad In co m e gains . cap i tal

sel l er

h ea d

I n c om e

capital gains. If the s ell er sel l s N ot T a xa b l e in the

Pr ovi si on s of p r op o s ed n ew sel l er . Th e b et w een dut y sa l e s va l u e di ff er en c e the st a mp the sale of t he of and in sec t i on 43CA to is applicable the

i mm ov a b l e h el d a s

p r op ert y

h a n d s o f sel l er

S to c k i n tr ade

a t a c on si d era t i on l es s t h a n t h e va l ue a s p er st a mp d ut y a ut h ori t i es

c o n si de ra t i on

men t i on e d in th e

dee d i s c har g ed t o t ax han ds a nd s ell er und er th e h e ad Pr of its g ains bus in es s or pr o fes s io n .

(w.e.f. A. Y.2014-2015)

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INCOME FROM OTH ER SOURCES: Deemed Income in the hands of purchaser (being individual & HUF) of immovable p roperty (Section 56)
Typ e o f pr op er t y I mmo va b l e Pr op ert y C ons id er at io n Val ue of t a xab le In c om e u /s 5 6 i n th e hands of p ur c has er ( indi v idu al & H UF) Th e st a mp p ro p e rt y . d ut y va l ue of such

W i t h o ut C on si d era t i on (a n d st a mp d ut y va l u e of p ro p e rt y exc ee ds R s . 50 ,0 00 /- )

( St a m p D ut y Va l u e t o b e a d op t e d i s t h e va l ue a s o n t h e da t e of a gr eem en t f or t ra n sf er a n d n ot a s on t h e da t e of r egi s t ra t i on of s uc h t ra n sf er p r ovi de d c on si der a t i on rec ei ved b ef o re o r on t h e d a t e of a gr eem en t of t ra n sf er i s b y wa y of a n y m o de ot h er t h a n c a sh ). St a mp d ut y v a l ue o f s uc h p r op ert y a s exc ee ds s u c h c on si d era t i on . ( St a m p D ut y Va l u e t o b e a d op t e d i s t h e va l ue a s o n t h e da t e of a gr eem en t f or t ra n sf er a n d n ot a s on t h e da t e of r egi s t ra t i on of s uc h t ra n sf er p r ovi de d c on si der a t i on rec ei ved b ef o re o r on t h e d a t e of a gr eem en t of t ra n sf er i s b y wa y of a n y m o de ot h er t h a n c a sh . )

I mmo va b l e Pr op ert y

F or a C o n si de ra t i on l es s t h a n t h e st a mp dut y va l u e o f t h e p ro p e rt y by an a m o un t exc ee di n g R s 50 ,00 0 /-

The effect of the p roposed change is explained herein below under different situations through an exampl e
Sit uat io ns Ta x I mpa ct b e for e Pr op os e d A me nd me nt Ta x a b l e I n c om e i n the hands of p u rc h a se r = Rs . 1 0 lacs Ta x a b l e I n c om e i n the hands of p u rc h a se r = Ni l Ta x I mpa ct a ft er Pr op os e d A m end m e nt

I mmo va b l e P r op ert y p u rc h a se d w i t h o ut c on si d er a t i on (st a m p dut y va l ue i s Rs . 10 l a c s ) I mmo va b l e P r op ert y p u rc h a se d fo r R s . 5 l a c s (st a mp d ut y va l u e i s R s . 10 lacs)

Ta x a b l e I n c o me i n t h e h a n d s o f p urc h a s er = R s . 10 l a c s

Ta x a b l e I n c o me i n t h e h a n d s o f p urc h a s er = R s . 5 l a c s (s t a m p d ut y R s 10 l a c s P u rc h a se Pri c e R s 5 l a c s )

(w.e.f. A. Y.2014-2015)

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TAX INCENTIVES AND RELIEFS : Deduction u/s. 80C for life insurance p remia, etc. : The amount of de duction for payment of Life I nsurance premium other than deferr ed annuity plan shall be allowable upto 15% (presentl y 10%) of the actual sum assured on policies issued after 0104-2013; in case of following persons a person with disability or a person with severe disability as referred to in section 80U, suffering from dise ase or ailment as specified in the rules made under section 80DDB. (w.e .f. Assessment Year 2014-15) Rajiv Gandhi Equity Saving Scheme u/s. 80CCG: Rajiv Gandhi Equity Savings Scheme was introduced in last Budget, wherein the deductions of 50% sub ject to maximum limit of Rs 25,000/- was available for investment in equity shares of listed companies. I t is proposed to extend the deduction to investment in listed units of an equity oriented fund. The deduction u/s 80CCG shall be available for 3 consecutive assessment years as against the present provisions of 1 year. The deduction earl ier allowable in case of gross total income upto Rs 10 lakhs is proposed to amended to be allowed in case of gross total income up to Rs 12 lakhs. (w.e.f. A. Y.2014-2015) Amendment of Section 80D in respect of Health Insurance premia: The Central Government has introduced various health schemes which were hither to not covered under Section 80D. Hence, it is proposed to cover any payment or contribution made by the assessee to Health schemes as may be notified by the Central Government u/s 80D, subject to overall monetar y limit. (w.e.f. A. Y.2014-2015)
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Deduction in respect of interest on loan taken for resid ential house property At present, deduction U/s 24(b ) on ac count of interest on home loan upto ma ximum of Rs 1,50,000/- p.a. I ncome from Hous e Proper ty. As a b oost to the housing industr y, a new section 80EE has been proposed to be introduced to provide that in computing the total income of an individual, interest payable on loan taken by him fr om any financial institution for the purpos e of acquisition of a residential house property shall be deducted subject to following conditions The deduc tion shall not e xceed one lakh rupees , I n a case where the interest payable for the previous ye ar is less than one lakh rup ees, the balance amount shall be allowed in the assessment year beginning on 1st April, 2015, The loan should be sanctioned by the financial institution during the period beginning on 1st April, 2013 and ending on 31st March, 2014, The amount of loan sanctioned for acquisition of the r esidential house property does not e xceed twe nty-five lakh rupee s, The value of the re sidential house property does not exc eed forty lakh rupees, The assessee does not own any residential house property on the date of sancti on of the loan. Where a deduction under this section is allowed for any is available under the head

assessment year, in respect of interest on housing loan, deduction shall not be allowed in respect of such interest under any other provisions of the I ncome-tax Act for the same or any other assessment year . However, the deduc tion under this sec tion is in addition to deducti on u/s. 24 (b ) of the Act. (w.e.f. A. Y.2014-2015)

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Deductions for contribution made to National Child ren s Fund Donation made to National Childrens Fund shall be e ntitled to deduction u/s. 80G at 100% as against present deduction of 50%. (w.e.f. A. Y.2014-2015) Contribution made to political parties or an electoral trust Contribution made to political parties or an electoral trust by any assessee, except a local authority or every artificial juridical person shall not be allowable as deduction u/s. 80GGB / 80GGC if the contribution is made in cash. (w.e.f. A. Y.2014-2015) Deduction under Section 80IA to power sector With a view to provide further time to the undertakings to commence the eligible activity, suns et date under section 80I A for the power sector to avail the tax incentive, is proposed to be extended by a further period of one year i.e. up to 31s t March, 2014. (w.e.f. A. Y.2014-2015) Deduction under Section 80JJAA Presently, section 80JJAA pr ovide for a deduction equal to thirty per cent of additional wages paid to the new regular workmen employed by an I ndian company in its industrial undertaking engaged in manufacture or producti on of article or thing. The tax incentive was intended for employment of factor y workers in the manufacturing sector. I n order to clarify the same, it is proposed to amend the provisions of section 80JJAA so as to provide that the deduction shall be available to an I ndian Company for an amount equal to thirty per cent of additional wages paid to the new regular workme n employe d by the assessee in such factory and not to other employees.

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I t is also proposed to provide that the deduction under this section shall not be available if the factory is hived off or transferred from another e xisting entity or acquired by the

assessee company as a result of amalgamation with another company. (w.e.f. A. Y.2014-2015) Tax Credit U/s 87A With a view to provide tax relief to the resident individual tax payers having income above Rs. 2,00,000/- but not exceeding Rs. 5,00,000/- rebate of tax is proposed to be allowed for a sum not exceeding Rs. 2,000/-. (w.e.f. A. Y.2014-2015) TAXATION OF INC OME BY WAY OF ROYALTY OR FEES FOR TECHNICAL SERVICES: Majority of ta x tre aties allows I ndia to levy tax on gross amount of royalty at rates ranging from 10% to 25%, whereas the tax rate as per section 115A is 10%. I n some cases, this has resulted in taxati on at a lower rate of 10% e ven if the treaty allows the income to be taxed at a higher rate . I n order to correct this anomaly, the tax rate in case of non-resident taxpayer , in respect of income by way of royalty and fee s for technical services as provided under section 115A, is pr oposed to be increased from 10% to 25% to any agreement entered after 31.03.1976, which is taxable under section 115A. (w.e.f. A. Y.2014-2015) LOWER RATE OF TAX ON DI VIDENDS RECEI VED FROM FOREI GN

COMPANIES: I t is proposed to amend section 115B BD which provides for taxation of gross dividends @ 15% received by an I ndian Company from a specified foreign company i n which it has a share holding of 26% or more for the financial year 2013-2014 which was pr eviously financial year 2012-2013. (w.e .f. A.Y. 2014-15)

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REMOVAL OF CASC ADING EFFECT OF T AX ON DIVIDENDS RECEIVED FROM FOREIGN COMPANI ES: I t is proposed to amend section 115- O in order to remove cascading effect whereby the tax on dividends received from the foreign

subsidiary (i.e . the foreign company in which domestic company holds more than 50% of e quity share capital) is payable under section 115BBD by the holding domestic company then, any dividend distributed by the holding company in the same year, to the extent of s uch dividends, shall not be subjec t to Dividend Distri bution Ta x under s ection 115-O of the I ncome-tax Act. (w.e .f. 1st June, 2013) ADDITIONAL INCOME-TAX ON DISTRI BUTED INC OME BY COMPANY FOR BUY-BACK OF UNLISTED SHARES: I t is proposed to insert a new section 115QA to provide that any distribution of income to a shar eholder by a domestic unlisted

company on buy- back of shares shall be chargeable to additional income-tax @ 20% on the distributed income, i.e . consideration paid by the company on buy-back of shares as reduced by the amount received by the company for issuance of such shares. Such receipt would be exemp t i n the hands of shar eholders. I t is also proposed to insert a new section 115QB to provide levy of interest @ 1% per month or part ther eof, for failure of payment of tax within the prescribe time limit. I t is further proposed to insert a new section 115QC to provide that in case of failure on payment of tax, the principal officer of the company and the company shall be deemed to be an assessee in default and all the provisions of the Ac t relating to recovery and collection of taxes shall apply accordingly. (w.e .f. 1st June, 2013) RATIONALISATION OF TAX ON DISTRIBUTED INCOME BY THE MUTUAL FUNDS: I t is proposed to amend section 115R to provide uniform taxation for all types of funds, other than equity oriented fund, by increasing rate of
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tax on distributed income from 12.5% to 25% in all cases where distribution is made to an individual or a HUF. Fur ther, in respect of income distributed by a Mutual Fund under an I nfrastructure Debt Fund (I DF ) sche me to a non-resident I nvestor is prop osed to b e taxed @ 5%. I nfrastructure debt fund scheme s hall have the same meaning as assigned to it in clause (1) of regulation 49L of the Securities and Exchange Board of I ndia (Mutual Funds) Regulations, 1996 made under the Securities and Exchange Board of I ndia Act, 1992. (w.e .f. 1st June, 2013) REDUCTION IN THE RATE OF SECURITY T RANSACTION TAX (STT) The prop osed new rates of STT are as under : (w.e .f. 1st June, 2013)
Na tur e o f ta xa bl e s e cur i ti es tr ans ac ti on Del i v er y b a se d p u rc h a s e of un i t s of a n eq ui t y ori en t ed f u n d en t er e d i n t o i n a r ec og n i s e d st oc k e xc h a n g e Del i v er y b a se d s a l e o f un i t s o f a n eq ui t y ori en t ed f u n d en t e re d i n t o i n a rec o gn i s e d st oc k e xc h a n g e Sa l e of a f ut ure s i n s ec uri t i e s Sa l e of a un i t of a n e q ui t y or i en t e d f un d t o t h e m ut ua l f un d Pa ya bl e by P urc h a s er E xis t ing Rat es % 0 .1 Pr op os e d Rat es % Ni l

Sel l er

0 .1

0 .0 01

Sel l er Sel l er

0 .0 17 0 .2 5

0 .0 1 0 .0 01

INTRODUCTION OF COMMODITIES TRANSACTION TAX: A new tax called Commodities Trans action Tax (CTT) is proposed to be levied on taxabl e commodities tr ansactions entere d into in a

recognised association. I t is proposed to define taxable commodities transaction to mean a transaction of sale of commodity derivatives in respect of commodities, other than agricultural commodi ties, traded in recognise d associations . The prop osed rates of CTT are as unde r :
Na tur e o f ta xa bl e s e cur i ti es tr ans ac ti on Sa l e of c om m odi t y d eri v a t i ve Pa ya bl e by Sel l er Pr op os e d Rat e % 0 .0 1

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The provisions with regard to collection and recovery of CTT, furnishing of returns , asses sment procedure , power of asse ssing officer,

chargeability of interest, levy of penalty, institution of prosecution, filing of appeal, power to the Central Government, e tc. have also been proposed to be pr ovided by insertion of Clause 105 to 124 in Chapter VI I of the Finance Bill, 2013, which will come into force by way of notification in the Official Gazette b y the Central Government. Further, it is propos ed to insert clause (xvi ) in section 36 to provide that an amount equal to the CTT paid by the assessee in respect of the taxable commodities transactions entered into in the course of his business during the previous year shall be allowable as deduction, if the income arising from such taxable commodities transactions is included in the income computed under the head Profits and gains of business or professi on. (w.e .f. A.Y. 2014-15) TAX RESIDENCE CERTIFICATE (TRC) FOR CLAIMING RELIEF UNDER DTAA: I t is clarified that submission of a tax residency certificate (TRC ) is necessary but submission of the TRC would not be a sufficient condition for claiming benefits under the agre ements referred to in sections 90 and 90A. I t is imperative to note that treaty benefit c an be claimed after satisfying two separate conditions namely residency and

beneficial ownership. TRC satisfies only residence criteria and not criteria of beneficial ownership. Thus , introduction of this clarification may lead to litigation related to claim of beneficial ownership even though TRC is submitted. (w.r .e .f. A.Y. 2013-14) GENERAL ANTI AVOIDANCE RULES (GAAR): The Finance Bill proposes to replace provisions of Chapter X- A and section 144B A and is proposed to b e made applicable from April 1, 2016 as against the current date of Ap ril 1, 2014. Following provisions: An arrangement, the main purp ose of which is to obtain a ta x benefit,
42

amendments

have

been

made

in

the

existing

GAAR

would

be

considered

as

an

impermissible

avoidance

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arrangement. The current provision of section 96 providing that it should be the mai n purpose or one of the main purpose s has been proposed to be amended accordingly. The factors like, period or time for which the arrangement had existed; the fact of payment of ta xes by the assessee; and the fact that an exit route was provided by the arrangement, would be relevant but not sufficient to determi ne whether the arr angement is an impermissible avoidance arrangement. The current provisions of section 97 which provided that these factors would not be relevant has been pr oposed to be amended accordingly. An arrange ment s hall also be deemed to be lacking commercial substance, if it does not have a significant effect upon the business risks, or net cash fl ows of any party to the arrange ment apart from any effect attributable to the tax benefit that would be obtained but for the application of Chapter X- A. The current p rovisions as contained in section 97 are propose d to be amende d to provide that an arrangement shall also be deemed to lack commercial substance if the condition pr ovided above is satisfied. The directions issued by the Approving Panel shall be binding on the assessee as well as the income-tax authorities and no appeal against such directions can be made under the provisions of the Act. The current provisions of section 144B A providing that the direction of the Approving Panel will be binding only on the

Assessing Officer have been propose d to be amended accordingly. Consequential amendments in other sections relating to procedural matters have also been proposed. APPLICATION OF SEIZED ASSETS UNDER SECTION 132B: The amount of exi sting liability of ta x, interest or penalty under the I ncome-tax Act, Wealth-tax Ac t, the Expenditure-tax Ac t, the Gift-tax Act and the I nterest-tax Ac t determined on completion of assessments pursuant to search is allowed to be adjusted against the assets seized during the course of search. The amendment is proposed to clarify that the e xisting liability does not
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include advance tax payable in accordance with the p rovisions of Part C of Chapter XVI I of the Act. (w.e .f. 1 s t June , 2013) DEFECTIVE RETURN u/s. 139(9): Where the return is filed without payment of self assessment tax or interest there on, the return s hall be treated as a defe ctive return by assessing officer. (w.e .f. 1 s t June , 2013) DIRECTION FOR SPECIAL AUDIT U/S. 142 (2A) AND EXCLUSION OF TIME IN COMPUTING THE PERIOD OF LI MITATION FOR COMPLETION OF

ASSESSMENTS AND REASSESSMENTS: The reasons for whi ch the Assessing Officer may direct special audit of accounts of the assessee is elaborately explained by the words the nature and complexity of the accounts, volume of the

accounts, doubts about the correctne ss of the accounts, multiplicity of transactions in the accounts or s pecialised nature of business activity of the assessee. Following period s hall be excluded in computing the period of limitation for the purposes of section 153 / 153B: where the decision of the Assessing Officer for special audit u/s. 142(2A) is challenged before a court, the period for which the matter is pending before the court (sub-clause (iii) s ubstituted w.e .f. 1 s t June , 2013)) period commencing from the date on which a reference or first of the references for exchange of information is made by an authority compe tent under an agreement referred to in section 90 or section 90A and ending with the date on which the information reques ted is last received by the Commissioner or a period of one year , whichever is less (sub-clause (viii) substituted w.e .f. 1 s t June , 2013)) period commencing from the date on which a refe rence for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Commissioner under section
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144B A(1) and endi ng on the date on which a direction under subsection (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the Assessing Officer (subclause (ix) substituted (w.e .f. A.Y. 2016-17) CLARIFICATI ON OF THE PHRASE TAX DUE FOR THE PURPOSES OF

RECOVERY IN CERT AIN CASES: Section 167C and S ection 179 pr ovides that where the ta x due fr om LLP or a private company as the case may be is irrecoverable from such LLP or company, then the partner/ director shall be jointly and severally liable for payment of such tax. . An explanation has been inserted to widen the definition of ta x due so as to cover penalty, interest and other sum payable under the Act. (w.e .f. 1st June, 2013) PROVISIONS PERTAI NING TO TDS/TCS: TDS on tra nsfer of certain immovable properties other than

agricult ural land: Applicability I t is proposed to ins ert ne w section 194-I A according to which If any immovable property [other than agricultural land as

defined in section 2(14)(iii)]; is transferred; by any person (other than the person referred to in secti on 194L A related to compuls ory acquisition); to a resident transferor; for a consideration of Rs . 50 lacs and above; then the transferee shall deduct ta x at s ource @ 1% of the consideration; at the time of credit of such sum to the account of the transferor or at the time of payment of such s um in cash or by issue of a cheque or draft or by any other mode , whichever is earlier; (w.e .f. 1st June, 2013)

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Scope of TDS u/s 194-LC extended : I n order to facilitate subscription by a non-resident in the long term infrastructure bonds issued by an I ndian company in I ndia (rupee denominated bond), it is proposed to amend section 194LC of the I ncome-tax Act s o as to provide that where a non-resident deposits foreign currency in a designated bank account and suc h mone y as converted in rupees is utilised for subscription to a long-term

infrastructure bond issue of an I ndian company, then, for the purpose of this section, the borr owi ng by the company shall be deemed to be in foreign currency. The benefit of reduced rate of ta x would, therefore, be available to such non-resident i n respect of the interest income arising on such subscription subject to other conditions provided in the s ection. The designated bank account should be solely for the purpose of deposit of money in foreign currency and such money is to be used, after conversion, for subscription to a rupee denominated long-term infrastructure bond issue of an I ndian company. (w.e .f. 1st June, 2013) PENALTY FOR NON FILLING ANNUAL INFORMATION RETURN (AIR): I t is proposed to amend section 271F A to pr ovide that if a person who is required to furnish an AI R, as required under section 285B A(1), fails to furnish such return on or before 31 s t Augus t as prescribed in section 285B A(2), then income-tax authority may direct that such person shall pay, b y way of penalty, a sum of Rs . 100/- for every day during which the failure continues. I t is further propos ed to provide that where such person fails to furnish the return within the period specified in the notice under section 285B A(5), he shall pay, by way of penalty, a sum of Rs. 500/- instead of Rs. 100/- for every day during which the failure continues, starting from the day immediate ly following the day on which the time specified in such notice for furnishing the return expires. (w.e .f. A.Y. 2014-15)

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WEALTH TAX Definit ion of urban land sub stituted : Definition of urban land in clause (b) of Explanati on 1 of section 2(ea) of Wealth Tax Ac t is propose d to be subs titute d in line with definition of Agricultural Land as proposed in Section 2(14) of the I ncome Tax Ac t. urban land means land situate (ii ) in any area which is comprised within the jurisdiction of a municipality (whe ther known as a municipality, municipal

corporation, notified area committe e, town area committee , town committee , or by any other name) or a cantonment board and which has a population of not les s than ten thousand; or (iii) in any area within the distance, measured aerially, not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in subclause (i ) and which has a population of more than ten thousand but not e xceeding one lakh; or not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in subclause (i ) and which has a population of more than one lakh but not exceeding ten lakh; or not being more than eight kilome tres, from the local limits of any municipality or cantonment board referred to in subclause (i ) and whic h has a p opulation of more than te n lakh, but does not include land on which construction of a b uilding is not permissible under any law for the time being in for ce in the area in which such land is situate d or the land occupied by any building which has been constructed with the approval of the appropriate author ity or any unused l and held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him or any land held by the assessee as stockin-trade for a period of ten years from the date of its ac quisition by him. (w.e .f. A.Y. 2014-15)
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Enabling provisions for facilitating electronic filing of annexure-less return of net wealth I t is proposed to insert new sections 14A and 14B in the Wealth-tax Act in lines with exi sting provisions of s ection 139C and s ection 139D of the I ncome Tax Act for facilitating filing of annexure-less return of income in electronic form by certain c lass of assessees. (w.e .f. 1st June, 2013)

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ANALYSIS
unless stated other wise. RATE OF SERVICE TAX:

SERVICE TAX

All changes will come into effect on enactment of Finance Bill, 2012,

Rate of Service Tax is proposed to remain unchanged. AMENDMENTS IN SEC 65B INTERPRETATIONS: (a) Approved Vocational Education C ourse [Sec. 65B (11)] The definition of approved vocational education course is

proposed to amend the words , 'or State Council of Vocational Training' (SC VT) is being inserted in (i ) along with National Council for Vocational Training (NC VT) Hence, the course s run by the indus trial training institutes / centers affiliated to State Council of Vocational Tr aining' (SC VT) would also be covered by negative list. to delete clause (i ii) dealing with courses run by an institute affiliated to the National Skill Development Corporation Hence, course run by an institute affiliated to the National Skill Development Corp oration subject to s ervice tax. (b ) Process amounting to manufacture or production of goods [Sec . 65B (40)] Definition is being amended to include processes on whi ch duties of excise are leviable under the Medi cinal and Toilet Pre parations (Excise Duties ) Act, 1955. Hence, the processes on which duties of excise are leviable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 would be covered by the negative list.

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AMENDMENT IN SEC. 65D NEGATIVE LI ST OF SERVICES: The word, 'seed' i s being omitted fr om the expression 'seed tes ting' hence, testing activities directly related to production of any

agricultural produce like soil testing, animal feed testing, tes ting of samples from plants or animals, for pests and disease causing microbes would be covered by the negative list. AMENDMENT IN SEC. 73 - RECOVERY OF SERVICE TAX NOT LEVIED OR PAID OR SHORT LEVI ED OR SHORT PAID OR ERRONEOUSLY REFUNDED: New section 73(2A) is proposed to be inserted so that where any appellate authority or tribunal or court concludes that the notice issued under the proviso to section 73(1) is not sustainable for the reason that the charge of, a. b. c. d. e. fraud; or collusion; or wilful misstatement; or suppression of facts; or contravention of any of the provisions or the rules with intent to evade payment of service tax, has not been es tablished against the person chargeable with the service tax, to whom the notice was issued, the Central Excise Officer shall determine the service tax payable by such person for the period of eighteen months, as if the notice was issued for the offences for which limitation of eighteen months AMENDMENT IN SEC. 77 PENALTY FOR CONTRAVENTION OF RULES OR PROVISION OF ACT : I t is proposed to substitute section 77(1)(a) to restrict the maximum penalty to Rs. 10,000/- for failure to ob tain registration. INTRODUCTION OF NEW SECTION 78A - PENALTY FOR OFFENCES BY DIRECTOR, ETC. OF COMPANY: I t is proposed to insert new section 78A in order to imp ose penalty to the extent of Rs. 1 Lac on any director, manager, secretary, or other officer of company who has committed following specified offences,

50

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viz a. evasion of service tax; or b. issuance of invoice, bill or, as the case may be, a challan without provision of ta xable service or c. availment and utilisation of credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially or d. failure to pay any amount collected as service tax to the credit of the Central Government be yond a period of six months from the date on which suc h payment becomes due, AMENDMENT IN SEC. 89 OFFENCES AND PENALTIES: I f the person colle cts service tax mor e than Rs. 50 lacs but doesnt pay the same to the government beyond the period of six months from the date on which it b ecomes payable then the term of imprisonment has been extended fr om one year to seven years . MISCELLANEOUS: (a) Proposed to amend section 86(5) to empower Appellate Tribunal to exte nd operation of stay for a per iod of 185 days where the delay is not attributable to the assess ee. The stay order , however, will stand vacated at the e nd of 365 days from the date of the order. (b ) Proposed to ins ert new section 90 to prescribe revised

punishments for offences, make certain offences cognizable/non cognizable & bailable. (c ) Proposed to inse rt new section 91 to provide power to

commissioner to arr est a person for specified offences. (d) Proposed to insert new section 99 to provide retrospective

exemption to the I ndian Railways on the service tax leviable on various taxable services provided.

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AMENDMENT IN NOTIFICATION NO. 26/2012 ST, DTD. 20TH JUNE, 2012:
Des cr i pti on of t a xab l e s er vi ce c on st r uc t i on o f a c om p l ex , b ui l di n g , c i vi l st r uc t u re s o r p a rt t h ere o f i n t en de d , f or a sa l e t o a b u ye r , w h ol l y or p a rt l y exc e p t w h ere en t i re c on si der a t i on i s rec ei v ed a ft er i s s ua n c e of c o mp l et i on c ert i fi c a t e b y t h e c omp et en t a ut h ori t y (i ) F or re si d en t i a l un i t h a vi n g c a rp et a re a up t o 2 ,00 0 sq . ft or w h ere t h e a m o un t c h a rg ed i s l e s s t h a n R s . 1 C r . F or ot h er t h a n (i ) a b ov e 25 % (i i ) Pr op os e d ta xab le por t io n (i ) C on dit io ns

(i i )

30 %

CE NV AT c re di t on i n p ut s u sed fo r p r o vi di n g t h e t a xa b l e s er vi c e has n ot b een t a k en un d er t h e p ro vi si on s of t h e CE NV AT C re di t R ul e s , 2 00 4 Th e V a l ue of La n d i s i n c l u ded i n t h e a m o un t c h a rg ed fr om the s er vi c e rec ei v er .

Hence, due to above amendment, the taxable portion for service tax purpose of all residential units having carpet area exceed 2,000 sq.ft or the amount charged for the residenti al unit is Rs. 1 Cr. or more and all commercial units would be 30%. (Effec tive rate of ST is 3.708%) (w.e .f 1 s t March, 2013) (vide notification no. 2/2013 S T) AMENDMENT IN NOTIFICATION NO. 25/2012 ST, DTD. 20TH JUNE, 2012: The following exemptions are being withdrawn: Services provided by an educational institution by way of auxiliary educational services or renting of immovable property. Temporary trans fer or permitting the use or enjoyment of a copyright relating to cinematographic films other than exhibition of

cinematograph fil ms in a cinema hall or a cinema theatr e. Services by way of vehicle parking to general public. Services provided to Government, a local authority or a

governmental authority, b y way of rep air or maintenance of aircraft.

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The following exemptions are streamlined / rationalized: Exemption limit of Rs. 25 lacs for charitable organizations, providing service towards any other object of general public utility would not be available. Service tax will be leviable on taxable service provided in

restaurants with air-conditioning or ce ntral air heating in any part of the establishment at any time during the year by omitti ng condition regarding license to serve liquor. The exemptions available to transportation of goods by railway and vessel and services provided by a goods transportation agency (GTA) are being harmonized. Exemption to trans portation of petrol eum and petroleum products, postal mails or mail bags and hous ehold effects by r ailways and vessels would not b e available. The benefit of transportation of agr icultural produce, foodstuffs, relief materials for specified purposes, or chemical fertilizers and and

oilcakes,

registered

newspapers

magazines

defence

equipments would be available to GTAs (w.e .f 1 s t April, 2013) (vide notification no. 3/2013 S T) ADVANCE RULI NG [U/S. 96A(B)(III)]: Scope of advance ruling is being extended to cover resident public limited companies. (w.e .f 1 s t March, 2013) (vide notification no. 4/2013 S T) SERVICE TAX VOLUNTARY COMPLIANC E ENCOURAGEMENT SCHEME, 2013 (VCES): A new scheme is proposed to be introduced to encourage voluntary compliance with the following main fe atures:

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a. Any person may de clare his tax dues under this scheme in respect of which no notice or an order of deter mination under Best Judgement As sessment (section 72) or Recovery of Service Tax not levied or paid or short levied or short paid or erroneously refunded (section 73) or Service Tax collected from any per son to be deposited with Central Governme nt (section 73A) has been issued or made before the 1 s t day of March, 2013. However person who has furnished return and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be eligible to make declaration for the period covered by the sai d return. b. Where a declaration has been made by a person against whom1. An inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of search of pre mises under section 82 or issuance of summons under section 83 or requiring production of accounts, documents or other

evidence or 2. an audit has been i nitiated, and such inquiry, i nvestigation or audit is pending as on the 1st day of March, 2013, then, the designated authority shall, by an order, and for reasons to be recorded in writing, reject such declaration. c. The defaulter will be required to make a truthful declaration of all his pending tax dues (fr om October 1 s t , 2007 to Decembe r 31 s t , 2012) and pay at least half of that before December 31, 2013; remaining half to be paid by: June 30, 2014 without interest; or

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By December 31, 2014 with interest from July 1, 2014 onwards;

Where the declarant fails to pay the tax dues, either in full or in part, as declared by him, such due along with interest the reon shall be recovered. d. Where the Commi ssioner of Central Excise has reasons to believe that the declaration made by a declarant under this Scheme was substantially false, he may, for reas ons to be recorded in writing, serve notice on the declarant in respect of such declaration

requiring him to show cause why he s hould not pay the tax dues not paid or s hort-paid. No notice can be issued after the expiry of one year from the date of declaration. e. On compliance with all the requir ements the person will have immunity from interest, penalties and other proceedings.

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M AJOR S ECTORI AL I MP AC TS
Sr. No 1. AUTO COMPONENT & TYRES Tax on royalty payments to foreign companies has been increased. But this is unlikely to have a significant impact as Indian auto component and tyre manufacturers generally pay under 2 per cent royalty to companies based in countries with favourable treatment under Double Tax Avoidance Agreements. SIDBIs re-financing capabilities have been doubled to Rs 100 billion per annum. This will help SMEs which make up the majority of auto component manufacturers. SECTOR IMPACT

2.

AIRPORT INFRASTRUCTURE

More parts are proposed to be covered in exemption from basic customs duty required for maintenance, repair and overhaul of aircrafts. Time period for consumption/installation of parts and testing equipments imported for manufacture, repair and overhaul (MRO) of aircrafts by units engaged in such activities is being extended from 3 months to 1 year. The move is expected to help carriers in reducing aircraft maintenance costs and help MRO units to become viable.

3.

CEMENT

Budget proposal to boost the infrastructure (especially roads) and housing segments is also expected to aid cement demand. However, this upside is likely to be offset by the increase in freight costs for cement companies, due to the proposed hike in railway freight.

4.

HOTELS

As of July 2012, only air-conditioned restaurants that served liquor were levied a service tax at 12.36% with an abatement of 60%, which is now proposed to include all air-conditioned restaurants, including those which do not serve liquor.

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Sr. No 5. BANKING Capital support to PSBs The Budget proposed to provide Rs 140 billion as capital infusion to all PSBs in 2013-14. The government also intends to help PSBs comply with Basel III regulations. Home loans The clear focus on giving a boost to the housing market is also positive for financiers. An additional tax deduction of Rs 100,000 on interest paid towards home loans upto Rs 25 lakh availed in 2013-14 by first-time home buyers (over and above the existing Rs 150,000 deduction) has been introduced to give a boost to the affordable housing segment. An amount of Rs 20 billion has been allocated to National Housing Bank (NHB), which is expected to mitigate the shortage of houses in urban areas. Farm credit For 2013-14, banks have been directed to lend Rs 7,000 billion to the agriculture sector, 21.7 per cent higher than the target for 2012-13. Benefit of concessional crop loans to farmers is extended to private banks also. Improving insurance penetration Banks are allowed to sell insurance products and microinsurance products of multiple companies to increase insurance penetration. Post offices to contribute towards financial inclusion Post offices will become part of the core banking solution and offer realtime banking services. Post offices are envisaged to contribute to financial inclusion in India. Inflation-indexed bonds The Budget proposes to introduce instruments to protect savings from inflation, like inflation-indexed bonds or inflation-indexed national security certificates to increase household financial savings 6. NON-FERROUS METALS Excise duty has been levied at 4% on silver obtained from smelting zinc or lead, to bring the rate on par with the duty levied on silver obtained from copper ores and concentrates. Export duty levy of 10% will help improve domestic availability of bauxite. The Railway Budget for 2013-14 has proposed a hike of 5.8% in the freight rate. This would translate into an estimated increase of Rs 500-700 per tonne in logistics costs for aluminium facilities located away from the coal mines. SECTOR IMPACT

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Sr. No 7. CONSTRUCTION AND ROADS Government agencies have once again been permitted to issue tax-free infrastructure bonds in 2013-14 totalling up to Rs 500 billion. This will provide additional funds to various infrastructure sectors such as roads, ports and power. After the substantial completion of the Pradhan Mantri Gram Sadak Yojana (PMGSY), the PMGSY II has been introduced to support rural road development. This is expected to benefit the small local road contractors. Allocation towards the JNNURM programme (Jawahar Lal Nehru National Urban Renewal Mission) has been doubled in 2013-14 from the previous year, which will boost spending on ongoing and upcoming urban infrastructure projects. Another positive for the roads sector is the proposal to set up an independent regulatory authority. In the medium term, this could help in reducing delays and fastracking the implementation of road projects. 8. FERTILISER In 2013-14, fertiliser subsidy is expected to stay constant at last years level of Rs 659 billion Subisidy on non-urea fertilisers is budgeted to decline by Rs 10 billion, despite higher demand, as nutrient-based subsidy (NBS) rates are expected to be reduced due to a fall in international prices. SECTOR IMPACT

The increase in budgeted subsidy of Rs 10 billion on indigenous urea for 2013-14 implies that the government is not expected to hike retail urea prices during the year. Further, unavailability of incremental domestic natural gas will force plants converting from high cost naphtha/fuel oil feedstock to import gas at relatively higher spot prices, thus keeping subsidy burden high. 9. HOUSING First-time home buyers taking a loan of up to Rs 25 lakh in 201314 can avail of an additional interest deduction of Rs 1 lakh in the first year, over and above the existing Rs 1.5 lakh benefit. This is likely to boost new home sales. In line with the Rural Housing Fund, an Urban Housing Fund is proposed to be established by National Housing Bank. The fund has been allocated Rs 20 billion for 2013-14. For premium apartments (with a carpet area of 2,000 sq ft or above and/or valued at Rs 1 crore or more), abatement in service tax has been reduced to 70 % from 75 %. 10. MEDIA AND ENTERTAINMENT The hike in customs duty on set-top boxes (STBs) to 10 % from 5 % would increase the subscriber acquisition costs of direct-tohome operators and multi-system operators in the short term. 839 FM channels in 294 cities are also intended to be auctioned in 2013-14.

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Sr. No 11. INFORMATION TECHNOLOGY The increase in surcharge from 5 % to 10 % for companies with taxable income higher than Rs 100 million will increase the effective MAT levied to 21 % from the current 20 %. Focus on education and skill development is a structurally long term positive for the sector. SECTOR IMPACT

12.

PAPER

Budgetary allocation for education has been increased by 19%, which is expected to maintain demand for variety of Writing & Printing paper.

13.

TELECOM

Excise duty on mobile phones, with a retail price exceeding Rs 2,000, has been hiked to 6% from 1%. Receipts of Rs 408 billion have been estimated from other communication services, which includes spectrum auctions, onetime spectrum charges, licence fees and spectrum usage charges.

14.

OIL & GAS

A. Proposed change in the exploration policy B. Clearances of stalled NELP blocks C. Review of the current natural gas pricing policy

15.

POWER

Increase in customs duty by 2% and CVD by 1% on imported steam coal for power sector; hike in railway freight rate by 5.8%. Extension of sunset clause by one year to avail the 10-year tax holiday for power projects Issuance of tax-free bonds of Rs. 500 billion and credit enhancement through IIFCL Proposal to adopt a PPP framework for coal production Reinstatement of generation-based incentive (GBI) for wind power, with an outlay of Rs. 8 billion

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Sr. No 16. STEEL A. The export duty on certain galvanised steel sheets has been brought down to nil, from 7.5% earlier with full exemption from export duty being provided, with effect from March 1, 2011, retrospectively. This move will benefit Indian galvanised steel exporters. B. The proposed schemes, providing a boost to the infrastructure (especially roads) and housing segments, are likely to give a fillip to overall demand for steel in the long run. C. The Railway Budget for 2013-14 has proposed a hike of 5.8% in the freight rate for coal, iron ore and steel. This would translate into an estimated increase in logistics costs, by Rs 300-500 per tonne, for steel manufacturers. We believe that steel players will pass on the hike in railway freight to endusers. 17. TEXTILE Excise duty of 3.6 % on readymade garments, which was made mandatory last year, has been removed. Garment manufacturers are expected to see an improvement in margins despite partially passing on the benefit to end-users. The Technology Upgradation Fund Scheme(TUFS) has been extended for the 12th Five-Year Plan, with an investment target of Rs 1,510 billion. 1. Customs duty on textile machinery and parts has been reduced to 5 % cent from 7.5 % making it more affordable for Indian manufacturers. 2. Allocation of INR 500 million to Ministry of Textile to incentivize setting up apparel parks within the Scheme for Integrated Textile Parks to house apparel manufacturing units. 3. Working capital and term loans at a concessional interest of 6% to handloom sector. SECTOR IMPACT

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H IGHLIGHTS OF T HE E CONOMIC S URVEY 2 012- 1 3

I ndia's economy expected to grow between 6.1% to 6.7 % in 2013-14 Global economy is likely to recover in 2013. Slowdown in the rate of growth of services to 6.6 % in 2012-13 contributed to a sl ow in overall growth. The survey underlines the need for s table and consistent policies for improved agricultural growth. FDI inflows in services sector grew robustly at 57.62% compared to growth of overall FDI inflows at 33.6%, in 2011-12. FDI in retail may pave the way for investment in new technology and marketing of agricultural produce in I ndia. The survey highlights that with net exp orts declining I ndia's balance of payments has come under pressure. I nflation expected to fall between 6.2 % and 6.6 % by March. Non-performing as sets (NPA) of the banking sector increased from 2.36 % of the total credit advanced in March 2011 to 3.57 % of total credit advanced in September 2012. Expenditure on soc ial services also increased considerably in the 12th Plan, with the education sector accounting for the largest share followed b y health. A number of legislative steps have been taken to secure the rights of people, like the RTI , MGNREGA, the Forest Rights Act, and the Right to Education. The survey address ed leakage of funds. I t said Direct B enefit Transfer (DBT) with the hel p of the Unique I dentification Number (Aadhaar ) can help address the issue. Legal Services Show a Steady Annual Growth of 8.2%. Survey hints more p ublic spending by government owned companies. Survey hints at fiscal deficit of 5.1%.

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Upward trend in employment maintained; Overall employment

increased by 6.94 l akh in June 2012 over June 2011. Employment r ose 1.6% in the last decade Economic S urvey acknowledges bene fits of mar ket diversification Measures taken b y government to protect consumers from price rise Rs 12,517 cr capital to be infused in PSB's t to augment their Tier-1 Capital Fast agricultural growth remains vital for jobs, incomes and food security Raising tax to GDP ratio to more than 11 pc critical for sustaining fiscal consolidation Robust I nflow of F DI in the Services Sector Chandigarh tops with highest s hare of services in GSDP wi th 85% I ndia has highest increase in share of s ervices in GDP at 8.1% Government to raise Rs 40,000 cr thr ough disinvestment Foreign Exchange reserves remains steady at $295.6 bn at Dec 2012 end Railway freight grows b y 5.1 per cent i n 2012-13 II P growth may remain sluggish Need to curb gold imports Recent steps to boost F Y14 outlook Diesel price hike to put upward pressure on inflation Food subsidy bill to increase subsidy Fiscal consolidation ke y to high growth WPI inflation to continue to moderate Prioritisation of e xpenditure seen as key ingredient of credible

medium-term fiscal consolidation plan. Lower interest rates could b oost investments . 3% growth in traffi c handled by ports during 2011-12, non major ports

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grow by 11.5%. Tourism, railways and telecom continue to lead other se ctors. Economic Survey 2013 for widening tax base and prioritising

expenditure to check fiscal deficit. Survey bets on savings to grow with the uptake in growth in the economy. Capital inflows e nough to finance curr ent account deficit. Survey signals higher divestment b y government; Times for re tail investors to own shares in blue chip government companies. I ndia, an emerging economic powe r, still has states that are only getting connecte d like Arunachal Pradesh and large pockets of darkness. More sectors have to come in under PPP apart from physical

infrastructure. PPP pr ojects in 2011-12 rose to 900 in number as against 600. About Rs7 lakh cr ore spent on the 15 major flagship programmes in the 11th Plan period. I ndian economy r esponded strongl y to fiscal & monetary stimulus & achieved growth of 8.6% & 9.3% in 2009-10 and 2010-11. I ndian economy faces two big risks investor preference for risks falls and crude price increase. Nearly half the additions to the I ndian labour force over the period 2011-30 will be in the age gr oup 30-49. Rupee remained volatile in the range of Rs53.02 to Rs 54.78 per US dollar during October 2012 to Januar y 2013. Global economy is also likely to recover in 2013 and various

government measures will help in impr oving the I ndian economy. The way out of slowdown is to shift spending from consumption to investment by removing bottlenecks to investments . I ncreased dependence on foreign borrowings is a concern.

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K EY F E ATURES OF B UDGET 2 013- 2 014

THE ECONOMY AND THE CHALLENGES Getting back to p otential growth rate of 8 percent is the challenge facing the countr y. Slowdown in I ndian economy has to be seen in the context of slowing global economic growth from 3.9 p er cent in 2011 to 3.2 per cent in 2012. However, no reason for gloom or pes simism. Of the large countries of the world only China and I ndonesia growing faster than I ndia in 201213. I n 2013-14, onl y China pr ojected to grow faster than I ndia. Between 2004 and 2008, and again in 2009-10 and 2010-11 the growth rate was over 8 p er cent and cross ed 9 per cent in four of those six years. 11th Plan period had average growth rate of 8 percent, highest during any Plan period, e ntirely under the UPA Government. High growth rate can again be achieved through coope ration. 'Higher growth leading to inclusive and sustainable development' to be the mool mantra. Government believes in inclusive development with emphasis on

improving human development indicators specially of wome n, the scheduled castes, the scheduled tribes, the minoriti es and some

backward classes. This Budget to be a testimony to that commitment. Fiscal Deficit, Current Account Def icit and Inflation The purpose of Budget to create economic space and find resources to achieve the objective of inclusive development. Dr Vijay Kelkar Committee made its recommendations to Government in September 2012. A ne w fiscal consolidation path with fiscal deficit at 5.3 per cent of GDP this year and 4.8 per cent of GDP in 2013-14 announced by the Government. Foreign investment in an imperative in view of the high current account deficit (C AD). FI I , FDI and ECB three main source of C AD Financing.
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Foreign investment that is consistant with our economic objectives to be encouraged. Development must be economically and ecologically sustainable and democratically legitimate. Battle against inflation must be fought on all fronts. Efforts in the past few months have brought down headline WPI inflation to about 7 per cent and core inflation to about 4.2 p ercent. Food inflation is worrying but all possible steps to be taken to augment the supply side to meet the growing demand for food items. Government expe nditure has both good and bad consequences and trick is to find the correct level of Government expenditure. Faced with huge fiscal deficit, Government expenditure rationalised in 2012-13. S ome economic space retrieved. Space to be used to fur ther Government's socio-economic objectives. THE PLAN AND BUDGETARY ALLOCATIONS Revised Estimates (RE) of the expendi ture in 2012-13 at 96 per cent of the Budge t Estimates (BE) due to slowdown and austerity measures. During 2013-14, BE of total expenditure of Rs. 16,65,297 crore and of Plan Expenditure at Rs. 5,55,322 crore. Plan Expenditure i n 2013-14 to grow at 29.4 per cent over Revised Estimates for the c urrent year. All flagship programmes fully and adequately funded and sufficient funds provided to each Ministry or Department consistent with their capacity to spend funds. Budget for 2013-14 to have one overarching goal of creating

opportunities for our youth to acquire education and skills that will get them decent jobs or self-employme nt. SC, ST, Women and Children Allocations for Scheduled Caste Sub Plan and Tribal Sub Plan increased substantially over the allocations of the current year. F unds allocated to these Sub Plans cannot be diverted.

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Rs. 97,134 crore allocated for programmes relating to women and Rs. 77,236 crore allocated for programme s relating to children. Ministry of Women and Child Development to design schemes that will address the conc erns of women b elonging to the most vulnerable groups, including single women and widows . An additional sum of Rs . 200 crore proposed to be provided to the Ministry to begi n work. Health and Education Health for all and e ducation to all remains priority. Rs. 37,330 crore allocated to the Minis try of Health & Family Welfare. New National Health Mission will get an allocation of Rs. 21,239 crore . Rs. 4,727 crore for medical education, training and rese arch. Rs. 150 crore provided for National Programme for the Health Care of Elderly. Ayurveda, Unani, S iddha and Homoeopathy are being mainstreamed. Allocation of Rs . 1,069 crore to Department of AYUSH. Rs. 1,650 crore allocated for six AI I MS-like institutions . Allocation of Rs. 65,867 crore to the Ministry of Human Resource Development, an increase of 17 pere nt over the RE of the current year. Rs. 27,258 crore provided for Sarva Shiksha Abhi yaan (SS A). An increase of 25.6 per cent over RE of the current year for investments in Rashtriya Madhyamik Shiksha Abhi yan (RMS A). Rs. 5,284 crore allocated to Ministries/Departments i n 2013-14 for scholarships to students belonging to SC, ST, OBC, Mi norities and girl children. Mid Day Meal Scheme (MDM) to be provided Rs. 13,215 crore. Government committed to the creation of Nalanda University as a centre of educational excellence. ICDS Rs. 17,700 crore allocated for I CDS in 2013-14 representi ng an increase of 11.7 per cent over 2012-13.

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Allocation of Rs . 300 crore in 2013-14 for a multi-sectoral programme aimed at overcoming maternal and child malnutrition. Programme to be implemented in 100 districts during 2013-14 to be sc aled to cover 200 districts the ye ar after . Drinking Water Rs. 15,260 crore allocated to Ministr y of Drinking Water and Sanitation. Rs. 1,400 crore provided for setting-up of water purification plants in 2000 arsenic - and 12000 fluoride-affected rural habitations. Rural Develop ment Allocation of Rs. 80,194 crore in 2013-14 for Ministry of Rural

Development mar king an increase of 46% over RE 2012-13. Proposal to carve out PMGSY-I I and allocate a portion of the funds to the new programme that will benefit States such as Andhra Pradesh, Haryana, Karnataka, Maharashtra, Punjab and Rajasthan. JNNURM Rs. 14,873 crore for JNNURM in B E 13-14 as against RE of Rs. 7,383 crore . Out of this, a significant portion will be used to supp ort the purchase of upto 10,000 buses, especially by the hi ll States. AGRICULTURE Average annual growth rate of agriculture and allied sector was 3.6% during XI Plan against 2.5% and 2.4% i n I X and X plans res pectively. I n 2012-13, total food-grain production will be over 250 million tonnes . Minimum support price for every agricultural produce has increased significantly under the UPA Government. Rs. 27,049 crore allocated to Ministr y of Agriculture, an i ncrease of 22 per cent over the RE of current year. Agricultural research provided Rs. 3,415 crore.

Agricultura l Credit For 2013-14, target of agricultural credit kept at Rs . 7 lakh crore. I nterest subvention scheme for short- term crop loans to be continued scheme extended for crop loans borrowed from private sector
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scheduled commer cial banks. Green Revolution Bringing green revolution to eas tern I ndia a remarkable success. Rs. 1,000 crore allocated in 2013-14. Rs. 500 crore allocated to star t a programme of crop diversification that would promote technological innovation and encourage farmers to choose crop alternatives. Rashtriya Krishi Vi kas Yojana and National Food Security Mission

provided Rs. 9,954 crore and Rs . 2,250 crore respectively. Allocation made for pilots programme on Nutri-Farms for introducing new crop varieties that are rich in mic ro-nutrients. National Livestock Mission National Livestock Mission to be set up. A provision of X 307 crore made for the Mission.

Food Security Addi tional provision of Rs . 10,000 crore for National Food Security Ac t.

INVESTMENT, INFRASTRUCTURE AND INDUSTRY Communication apprehension burden. Need of ne w and innovative instruments to mobi lise funds for or with investors to be improved about to remove any

distrust,

including

fears

undue

regulatory

investment in infrastructure sector . Me asures such as : I nfrastructure Debt Funds (I DF ) to be e ncouraged, I I FCL to offer credi t enhancement. I nfrastructure tax-fr ee bond of Rs . 50,000 crore in 2013-14, Build roads in North eastern states and connect them to Myanmar with assistance from WB & ADB , Raising corpus of Rural I nfrastructure Development Fund (RI DF) to Rs . 20,000 crore and

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Rs. 5,000 crore to NAB ARD to financ e construction for warehousing. Window to Panchayats to finance construction of godowns. Road Const ruction A regulator y author ity for r oad sector. 3000 kms of road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh will be awarded in the firs t six months of 2013-14. Cabinet Committee on Investment The Cabinet Committee on I nvestment (CCI ) has been set up. Decisions have been taken in respect of a number of gas , power and coal projects. New Investment Companies investing X 100 crore or more in plant and machinery during the period 1.4.2013 to 31.3.2015 will be entitled to deduct an

investment allowance of 15 per cent of the investment. I ncentives to semiconductor wafer fab manufacturing facilities,

including zero customs duty for plant and machinery. Savings Need to incentivise greater savings by household sector in financial instruments . F ollowi ng measures proposed: Rajiv Gandhi Equity Savings Scheme to be liberalised. Addi tional deduction of interest upto Rs. 1 lakh for a person taking first home loan up to Rs . 25 lakh during period 1.4.2013 to 31.3.2014 I n consultation with RBI , instruments protecting savings from inflation to be intr oduced. Indust rial Corridors Plans for seven new cities have been finalised and work on two ne w smart industrial cities at Dholera, Gujarat and S hendra Bidkin,

Maharashtra will start duing 2013-14

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Delhi Mumbai I ndustrial Corridor (DMI C) to be provided additional funds during 2013-14 within the share of the Government of I ndia in the overall outlay, if re quired. Chennai Bengaluru I ndustrial Corridor to be developed. Preparatory work has started for Bengaluru Mumbai I ndustrial Corridor.

Coal I n the medium to long term need to reduce our dependence on imported coal. One way forward is to devise a PPP policy framework with Coal I ndia Limited as one of the partners. Ministry of Coal to announce Government's policies in due course.

Power Guidelines regarding financial restructuring of DI SCOMS have been announced. State Government ur ged to prepare the financial the

restructuring plan, quickly sign MoU and take advantage of scheme. Micro, Small and M edium Enterprises

Benefits or preferences enjoyed by MSME to continue upto three years after they grow out of this categor y.

Refinancing capacity of SI DBI raised to Rs . 10,000 crore. A sum of Rs . 2,200 crore during the 12th Plan period to set up 15 additional Tool Rooms and Technology Development Centres with World Bank assistance.

Textiles Technology Upgradation Fund Sche me (TUFS ) to conti nue in 12th Plan with an investment target of Rs . 1,51,000 crore. Allocation of Rs . 50 crore to Ministry of Textile to incentivise setting up Apparel Parks withi n the SI TPs to hous e apparel manufac turing units . A new scheme called the I ntegrated Processing Development Scheme will be implemented in the 12th Pl an to address the environmental concerns of the te xtile industry.

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Working capital and term loans at a concessional interest of 6 per cent to handloom sector. Scheme of Fund for Regeneration of Traditional I ndustries (SFURTI ) extended to 800 cl usters during the 12th Plan. Foreig n Trade Support to measures to be taken to boost e xports of goods and services. FINANCIAL SECTOR A standing Council of Experts to be constituted in the Ministry of Finance to analyse the international competitiveness of the I ndian financial sector. Banking Compliance of public sector banks with Basel II I regulations to be ensured. RS. 14,000 crore provided in BE 2013-14 for infusing capital. All branches of public sector banks to have ATM by 31.3.2014. Proposal to set up I ndia's first Wome n's Bank as a public sector bank. Provision of Rs. 1,000 crore as initial capital. Rs. 6,000 crore to Rural Housing Fund i n 2013-14. National Housing Bank to set up Urban Housing Fund. Rs. 2,000 crore to be provided to the fund in 2013-14. Insurance A multi-pronged approach to increase the penetration of insurance, both life and gener al, in the country. Number of proposals finalised, in consultation with I RDA such as empowering insurance companies to open branches in Tier-II cities and below without prior approval of I RDA, KYC of banks to be sufficient to acquire insurance policies, banks to be permitted to act as insurance brokers, banking correspondent allowed to sell micro-insurance

products and achieving the goal of having an office of LI C and an office of at least one public sector general insurance company in towns with populati on of 10,000 or mor e.

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Rashtriya Swas thya Bima Yojana to b e extended to other categories such as rickshaw, auto-rickshaw and taxi drivers, sanitation workers , rag pickers and mine workers. A comprehensive sector social by security package to be evolved for

unorganised schemes. Capital Market

facilitating

convergence

among

different

Proposal to amend the SEBI Act, to strengthen the regulator, under consideration.

Number of proposal finalised in consul tation with SEBI . Designatged depository participants, authorised by SEBI , may

register different classes of portfolio investors, subject to compliance with KYC guidelines. SEBI will simplify the procedures and prescribe uniform registration and other norms for entr y for foreign p ortfolio investors. Rule that, where an investor has a stake of10 per cent or less in a company, it will be treated as FI I and, where an investor has a stake of more than 10 pe r cent, it will be tre ated as FDI will be laid. FI I s will be permitted to participate in the exchange traded currency derivative segment to the exte nt of their I ndian rupee exposure in I ndia. FI I s will also be permitted to use their investment in corp orate bonds and Government securities as collateral to meet their margin

requirements. SEBI to prescribed requirement for angel investor pools by which they can be recognised as Category I AI F venture capital funds . Small and medium enterprises, to be permitted to list on the SME exchange without being required to make an initial public offer (I PO). Stock exchanges to be allowed to introduce a dedicated debt segment on the exchange.

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ENVIRONMENT Support to municipalities that will impl ement waste-to-energy projects . Government to pr ovide low interest bearing fund from the National Clean Energy Fund (NCEF ) to I REDA to on-lend to viable renewable energy projects . 'Generation-based incentive' reintroduced for wind e nergy projects and Rs . 800 crore allocated for this purpose. OTHER PROPOSALS Skill Development Target of skilling 50 million people in the 12th Plan period, including 9 million in 2013-14. Defence Allocation for Defence increased to Rs. 2,03,672 crore including Rs. 86,741 crore for capital expenditure. Constraints not to come in the way of pr oviding any addition

requirement for the security of nation. Science and Technology Despite constraints substantial enhancements given to Science and Technology, Space and Atomic Energy. Rs. 200 crore to be set apart to fund organisations that wi ll scale up S&T innovations and make these products available to the p eople. Broadcast ing All cities having a population of more than 1,00,000 will be covered by private FM radio se rvices. Three promises Promises made to woman, youth and poor. We s tand in solidarity with our girl children and women. And we pledge to do everything possible to empower the m and to keep them safe and secure. A fund - "Nirbhaya Fund" - to b e setup with Government contri bution of Rs. 1,000 crore.

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Youth to be motivated to voluntarily join skill development

programmes. National Skill Development Corporati on to set the curriculum and standards for training in different skills. X 1000 crore set apart for this scheme. To the p oor of I ndia direct benefit transfer scheme will be rolled out throughout the country during the te rm of the UPA Gov ernment with the motive " Aapka paisa aapke haath". Budget Estimates Plan expenditure is placed at Rs. 5,55,322 crore . Non Plan Expenditure is estimate d at Rs. 11,09,975 crore . Fiscal deficit for the current year contained at 5.2 per cent and for the year 2013-14 at 4.8 per cent. Revenue deficit for the current year at 3.9 per cent and for the year 2013-14 at 3.3 per cent. By 2016-17 fiscal deficit to be brought down to 3 per cent, revenue deficit to 1.5 per c ent and effective r evenue deficit to zero per cent.

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MACRO ECONOMIC VIEW

Particulars Parameter Estimated 2012-2013 1.8 3.1 6.6 5.0 7.4 8.0 Foreca st 2013-2014 3.5 5.1 7.7 6.4 6.5 7.7-7.8

Agriculture I ndustry Growth (%) Services Total GDP Inflation Interest Rate WPI Average 10-year G-sec (Year-end) Re/US$ (Year-end) Fiscal Deficit (as a % of GDP)

Exchange Rate

53

51-52

Fiscal def icit

5.4

5.0

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Budget at a Glance
(In Crore of Rupees) P ar t icu lar s 20 11 - 20 12 Actu a ls 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . 16 . 17 . 18 . 19 . 20 . 21 . 22 . 23 . Re v en u e R ec e ip t s Ta x R e v en u e (n et t o c en tre ) N on - T ax R e ven u e Cap ita l R e c eip t s ( 5+ 6 +7 ) $ Re co v er i e s o f L oan s Oth er R ec ei p t s Bor ro win g s a n d oth e r l i ab il iti e s Tot al R ec e ip t s (1 + 4) N on - Pla n E xp en d itu re On R e v en u e Ac cou n t o f wh i ch , In t er e st P ay me n t s On Cap i tal A cc ou n t Plan E xp en d i tu r e On R e v en u e Ac cou n t On Cap i tal A cc ou n t Tot al E xp en d i tu r e (9 + 13 ) Re v en u e E xp en d i tu r e (1 0+ 1 4) Of Wh ich , G ran t s f or cr e ation o f Cap ita l A s s et s Cap ita l E xp en d itu re (1 2 +1 5) Re v en u e D e fi cit ( 17 - 1) E f fe ct i ve R e v en u e De f ic it (2 0 -1 8) Fi s cal D e fi cit { 16 - (1 + 5 +6 )} Pri ma ry De f ic it (2 2 -1 1) 15 85 80 39 43 48 (4 .4 ) 26 17 66 (2 .9 ) 51 59 90 (5 .7 ) 24 28 40 (2 .7 ) 16 77 53 39 12 45 (3 .9 ) 26 69 70 (2 .7 ) 52 09 25 (5 .2 ) 20 42 51 (2 .0 ) 22 91 29 37 98 38 (3 .3 ) 20 51 82 (1 .8 ) 54 24 99 (4 .8 ) 17 18 14 (1 .5 ) 75 14 37 62 97 65 12 16 72 55 29 28 18 85 0 18 08 8 51 59 90 13 04 36 5 89 19 90 81 20 49 27 31 50 79 94 1 41 23 75 33 37 37 78 63 9 13 04 36 5 11 45 78 5 13 25 82 20 12 - 20 13 R ev i sed E st im at es 87 18 28 74 21 15 12 97 13 55 89 98 14 07 3 24 00 0 52 09 25 14 30 82 5 10 01 63 8 91 96 99 31 66 74 81 93 9 42 91 87 34 33 73 85 81 4 14 30 82 5 12 63 07 2 12 42 75 20 13 - 20 14 B u d ge t E st im at es 10 56 33 1 88 40 78 17 22 52 60 89 67 10 65 4 55 81 4 54 24 99 16 65 29 7 11 09 97 5 99 29 08 37 06 84 11 70 67 55 53 22 44 32 60 11 20 62 16 65 29 7 14 36 16 9 17 46 56

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Receipts
(In Crore of Rupees)
Particulars REVENUE RECEIPTS T a x R e ve n u e 1 G r o s s Ta x R e v e n u e C o r p o r a t i o n Ta x Ta x e s o n I n c o m e W ea l t h Ta x Customs Union Excise Duties S e r v i c e Ta x Ta x e s o n U n i o n Te r r i t o r i e s Less - NCCD transferred to the National Calamity Contigency Fund/National Disaster Response Fund Less - States share 1(a) C e n t r e ' s N e t Ta x R e v e n u e 2 N o n - Ta x R e v e n u e Interest receipts Dividend and Profits E xt e r n a l G r a n t s O t h e r N o n Ta x R e v e n u e Receipts of Union Te r r i t o r i e s To t a l N o n T a x R e v e n u e To t a l R e v e n u e R e c e i p t s ( 1 a + 2 ) 3 Capital Receipts A. Non-debt Receipts Recoveries of loans and advances@ Miscellaneous Capital Receipts To t a l B. Debt Receipts* Market Loans Short term borrowings E xt e r n a l A s s i s t a n c e ( N e t ) Securities issued against Small Savings State Provident Fund (Net) Other Receipts (Net) To t a l To t a l C a p i t a l R e c e i p t s ( A + B ) 4 D R AW - D OW N O F C A S H B A L A N C E To t a l R e c e i p t s ( 1 a + 2 + 3 + 4 ) Financing of Fiscal Deficit (3B+4) Receipts under MSS (Net) @ e xc l u d e s r e c o v e r i e s o f s h o r t - t e r m l o a n s a n d advances from States, loans to Government servants, etc. 2011-2012 Actuals 2012-2013 R e vi s e d Estimates 2013-2014 Budget Estimates

889176 322816 170343 788 149328 145608 97509 2785 3998 255414 629765 20252 50608 2962 46835 1015 121672 751437

1038037 358874 206095 866 164853 171996 132697 2656 4375 291547 742115 16595 55443 2762 53790 1123 129713 871828

1235870 419520 247639 950 187308 197554 180141 2758 4800 346992 884078 17764 73866 1456 78000 1166 172252 1056331

14073 24000 38073 436211 126866 12449 -10302 10804 -44048 531980 568918 -15990 1304365 515990 ... 17968 467384 45746 2214 8626 10000 -7895 526075 564148 -5150 1430825 520925 ... 22995

10654 55814 66468 484000 19844 10560 5798 10000 12297 542499 608967 ... 1665297 542499 20000 11400

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Expenditure
(In Crore of Rupees)
2011-2012 Particulars Actuals 2012-2013 R e vi s e d Estimates 1 A. 1. 2. 3. 4. 5. 6. 7. NON-PLAN EXPENDITURE Revenue Expenditure Interest Payments and Prepayment Premium Defence Services Subsidies Grants to State and U . T. G o v e r n m e n t s Pensions Police Assistance to States from National Calamity Contigency Fund/National Disaster Response Fund (NDRF) 8. Other General Services (Organs of State, tax collection, e xt e r n a l a f f a i r s e t c . ) 9. 10. Social Services (Education, Health, Broadcasting etc.) Economic Services (Agriculture,Industry, Power, Tr a n s p o r t , C o m m u n i c a t i o n s , S c i e n c e & Te c h n o l o g y , e t c . ) 11. 12. 13. Postal Deficit E xp e n d i t u r e o f U n i o n Te r r i t o r i e s w i t h o u t L e g i s l a t u r e Amount met from National Calamity Contigency Fund/ Contribution to National Disaster Response Fund (NDRF) 14. Grants to Foreign Governments To t a l R e v e n u e N o n - P l a n E xp e n d i t u r e B. 1. 2. 3. 4. Capital Expenditure Defence Services Other Non-Plan Capital Outlay Loans to Public Enterprises Loans to State and U . T. G o v e r n m e n t s 72 3407 80 11478 479 8102 469 30131 417 67902 69579 86741 812049 919699 992908 2163 3229 4144 -2459 -4375 -4800 3853 4147 4395 21751 5716 21965 5838 24334 6717 19444 21304 23114 19225 21095 22903 2459 4375 4800 51523 61166 33106 57901 63836 37131 76981 70726 40895 273150 103011 217941 316674 108925 257654 370684 116931 231084 2013-2014 Budget Estimates

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2011-2012 Particulars 5. 6. Loans to Foreign Governments Others To t a l C a p i t a l N o n - P l a n E xp e n d i t u r e To t a l N o n - P l a n E x p e n d i t u r e 2. A. 1. 2. PLAN EXPENDITURE Revenue Expenditure Central Plan Central Assistance for State & Union Te r r i t o r y P l a n s State Plans U n i o n Te r r i t o r y P l a n s To t a l R e v e n u e P l a n E xp e n d i t u r e B. 1. 2. Capital Expenditure Central Plan Central Assistance for State & Union Te r r i t o r y P l a n s State Plans U n i o n Te r r i t o r y P l a n s To t a l C a p i t a l P l a n E xp e n d i t u r e To t a l - P l a n E x p e n d i t u r e To t a l B u d g e t S u p p o r t for Central Plan To t a l C e n t r a l A s s i s t a n c e for State & UT Plans T O TA L E X P E N D I T U R E * DEBT SERVICING 1. 2. 3. 4. 5. Repayment of debt** To t a l I n t e r e s t P a y m e n t s To t a l D e b t S e r v i c i n g ( 1 + 2 ) Revenue Receipts Percentage of 2 to 4 111933 273150 385083 751437 36.35% 116669 316674 433343 871828 36.32% 167072 370684 537756 1056331 35.09% 104016 1304365 112002 1430825 136254 1665297 308359 317185 419068 11556 10058 1498 78639 412375 12401 11079 1322 85814 429187 13032 11057 1975 112062 555322 67083 73413 99030 333737 343373 443260 92460 90072 2388 99601 96068 3533 123222 118873 4349 241276 243772 320038 79941 891990 81939 1001638 117067 1109975 248 -238 700 -318 ... -302 Actuals 2012-2013 R e vi s e d Estimates 2013-2014 Budget Estimates

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GRAPH SHOWING SOURCES & APPLICATION OF RUPEE

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S TATEMENT OF R EVENUE F OREGONE

AS PER RECEIPT BUDGET 2013-14 Effective tax rate* of sample companies in the public and private sectors (financial year 2011-12)
Sl. No. 1 2 Public Private Total
*

Sector

Number of Companies 230* 494315 494545

Share in total profits (in %) 27.05 72.05 100.00

Share in total tax payable (in %) 27.16 72.84 100.00

Effective tax rate (in %) 22.21 23.10 22.85

Effective tax rate is inclusive of surcharge and education cess.

Effective tax rate* of sample companies in the manufacturing and service sectors (financial year 2011-12)
Sl. No. 1 2 Sector Number of Companies 127932 366174 494106 Share in total profits (in %) 50.09 49.91 100.00 Share in total tax payable (in %) 48.24 51.78 100.00 Effective tax rate (in %) 22.01 23.70 22.85

Manufacturing Service Total

Effective tax rate is inclusive of surcharge and education cess.

Revenue Foregone (Direct Taxes) in the F.Y. 2011-12 and 2012-13

(In Crore of Rupees)

Particulars Corporate Income Tax Personal Income Tax Total

Revenue Foregone Project Revenue in 2011-12 Foregone in 2012-13 61765.3 39375.4 101140.7 68007.6 45464.1 113471.7

Revenue Foregone (Indirect Taxes) in the F.Y. 2011-12 and 2012-13

Particulars Excise Duty Customs Duty Revenue Foregone Revenue Foregone in in 2010-11 2011-12 (Estimated) 195590 236852 206188 253967

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A N ALYSIS OF T AX AND N ON- TAX R EVENUE R ECEI PTS

(In crores of Rupees)
Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Revised Budget 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 305991 347077 434387 541864 540259 572811 788471 751437 871828 1056331 REVENUE RECEIPTS A. Tax Revenue (Net of States's share) (Details in Annex 2) B. Non-Tax Revenue (Details in Annex 2) CAPITAL RECEIPTS 1 Internal Debt-Market Borrowings (Net) 1.01 Gross Market Borrowings 1.02 Less - Repayments 2 External Assistance(Net) 2.01 Gross External Borrowings 2.02 Less Repayments 3 Recovery of Loans* 4 Small Savings(Net) 5 State Provident Funds(Net) 6 Special Deposits(Net) 7 Disinvestment of equity in public sector enterprises 8 Other items of Capital receipts(Net)# TOTAL- RECEIPTS Deficit on Revenue Account Primary deficit Draw-down of cash balance Fiscal deficit * Net of Recovery of Ways & Means Advances Loans to Govt. servants, etc. # Excludes Securities (a) issued to the IMF omitted per contra from Capital Expenditure (b) Securities issued to - Nationalised Banks - SBI (c) Securities issued to Oil Companies (d) Securities issued to Food Corporation of India (e) Securities issued to UTI (f) Redemption of securities issued to oil and fertiliser companies (g) Securities issued to Fertilizer Companies (h) Asset management Trust for SASF of IDBI (i) Conversion of interst receivable into equity in NHPC & THDC (i) Securities issued to RBI to set off loans to IDFC Ltd. (k) Enhancement of the corpus of Contingency Fund of India (l) Realisation of Stressed Assets of IDBI

224798 81193 200391 46031 80350 34319 14753 21855 7102 62043 5310 -5750 4424 73580 506382 78338 -1140 -1461 125794 1687 510

270264 76813 179549 95374 131000 35626 7472 14470 6998 10645 5545 487 1581 58445 526626 92300 13805 -20888 146435 650 506

351182 83205 144482 110446 146000 35554 8472 16358 7886 5893 5178

439547 102317 197978 131768 168101 36333 9315 16808 7493 5100 -11302 3897

443319 96940 299863 233630 273000 39370 11015 21022 10007 6139 -1302 8041

456536 116275 453063 398424 451000 52576 11038 22177 11139 8613 13256 16056

569869 218602 402428 325414 437000 111586 23556 35330 11774 12420 11233 12514

629765 121672 568918 436211 509796 73585 12448 26034 13586 18850 -10302 10804

742115 129713 564148 467384 558000 90616 2214 18490 16276 14073 8626 10000

884079 172252 608967 484000 629009 145009 10560 27646 17086 10654 5798 10000

534 13959 578869 80222 -7699 4517 142573 1000 495

38795 20405 739842 52569 -44118 -27171 126912

566

24581

22846

18088 82819 1320355 394348 242840 -15990 515990 10000 398

24000

55814

41774 -18905 -5555 840122 1025874 1190899 253539 338998 252252 144788 205389 139569 43834 -1386 6430 336992 418482 373592

37851 32141 1435976 1665298 391245 379838 204251 171814 -5150 520925 542499 11000 400 11000 400

479

479

469

433

415 -88

595 500

40

3654

9051

1613

4149

42149

9996 17263 24121 16200 362 -13343 7500 9000 640 350 450 134 300 300 300 300 20000 1225 -5763 20554 75942 10306

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T RENDS IN E XPENDI TURE

Actuals Actuals 2004-05 2005-06 A. Non-Plan Expenditure 1. 2. 3. 4. 5. 6. 7. 8. 9. Interest Payments and Debt Servicing Defence Expenditure Subsidies Grants to States & U.T. Governments Grants to Foreign Governments Pensions Police Other Non-Plan Revenue Expenditure Non-Plan Capital Expenditure (Excluding Defence) Loans & Advances to State & U.T. Governments Loans to Foreign Governments Other Loans Non-Plan Expenditure of UTs without Legislature On Revenue Account On Capital Account B. Plan Expenditure On Revenue Account On Capital Account TOTAL EXPENDITURE On Revenue Account On Capital Account 365960 126934 75856 45957 14784 990 18300 10654 33520 34798 365100 132630 80549 47522 30475 1214 20256 12379 32526 3357 Actuals 2006-07 Actuals Actuals 2007-08 2008-09 608721 192204 114223 129708 38161 1442 32940 19904 68241 7271 Actuals 2009-10 721096 213093 141781 141351 45946 1561 56149 25999 79823 10952 Actuals 2010-11 818299 234022 154117 173420 49790 2256 57405 27339 86423 23619 (In crores of Rupees) Actuals Revised Budget 2011-12 273150 170913 217941 51523 2163 61166 33106 66136 11478 2012-13 2013-14 316674 178504 257654 57901 3229 63836 37131 70201 8102 370684 203672 231084 76980 4144 70726 40895 77068 30131 891990 1001638 1109975 413527 507589 150272 171030 85510 57125 35734 1294 22104 13541 38197 6183 91681 70926 35769 1355 24261 13924 47103 47891

10.

612

89

102

86

86

83

85

72

3407

80

11. 12. 13.

283 1599 1673 1834 -161 132292 87494 44798 498252 384329 113923

129 1796 2178 2305 -127 140638 111858 28780 505738 439376 66362

103 1292 2070 2242 -172

42 1465 2056 2274 -218

833 790 2918 3119 -201 275235 234774 40461

124 936 3298 3334 -36 303391 253884 49507 6308 3515 3775 -260 379029 314232 64797 1197328 1040723 156605

248 311 3783 3853 -70 412375 333736 78639

700 308 3991 4147 -156 429187 343373 85814 257 4254 4395 -141 555322 443260 112062

169860 205082 142418 173572 27442 31510

583387 712671 514609 594433 68778 118238

883956 1024487 793798 90158 911809 112678

1304365 1430825 1665297 1145785 1263072 1436169 158580 167753 229128

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D EBT P OSI TION OF T HE G OVERNMENT OF I NDI A

The outstanding internal and external debt and other liabilities of the Government of India at the end of 2012-2013 is estimated to amount to Rs.50,25,071.64 crore, as against Rs. 44,68,414.54 crore at the end of 2011-2012 (RE). Broad details are as follows:(In Crores of Rupees)

As on 31st March 2013 As on 31st March 2014 Internal debt and other liabilities of which under Market Stabilisation Scheme External debt Total 48,66,829.00 . 1,72,302.01 50,39,131.01 54,68,622.11 20,000.00 1,82,862.11 56,51,484.22

T AX R EVENUES R AI SED BUT NO T R E ALISED ( Princi pal Taxes)

(Under Rule 6 of the FRBM Rules 2004)
(As at the end of Reporting Year 2011-2012)
(In Crores of Rupees)
Major Head Over 1 year but less than 2 years Taxes on Income & Expenditure 0020 Corporation Tax 0021 Taxes on Income other than Corporation Tax Over 2 years but less than 5 years Description Amount under disputed (Rs. In Crores) Over 5 years but less than 10 years Over 10 years Total Over 1 year but less than 2 years Amount under disputed (Rs. In Crores) Over 2 Over 5 Over 10 years Total Grand Total

years but years but less less than 5 years than 10 years

82898.00 107103.00 15759.00 2611.00 208371.00 20035.00 11372.00 14466.00 3232.00 49105.00 257476.00

44520.00

18711.00

6149.00 1321.00

70701.00

6344.00

4929.00

3524.00 2028.00 16825.00

87526.00

38378.00

88392.00

9610.00 1290.00 137670.00 13691.00

6443.00 10942.00 1204.00 32280.00 169950.00

Taxes on Commodities 14177.78 & Services 0037 Customs 0038 Union Excise 0044 Service Tax Total 1854.61 7174.99 5148.18

22328.22 3215.74 12148.48 6964.00

9038.77 2251.18 1858.66 471.51

47795.95 7400.52 26652.75 13742.68

1809.30 389.46 824.69 595.15

2538.77 713.96 1549.57 275.24

2971.59 1162.95 681.80 2255.65 34.14 451.70 710.15 1.10

8482.61 2236.92 5340.06 905.62

56278.56 9637.44 31992.81 14648.30

6128.17 1201.11 1051.94 578.56

97075.78 129431.22 24797.77 4862.18 256166.95 21844.30 13910.77 17437.59 4394.95 57587.61 313754.56

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