Central Union Budget for 2013-14 has been presented by Finance Minister Mr.P.Chidambaram and it will be great for someones and disappointing for many of the common people. Congress Government is always being supported for Foreign Direct Investors and gave a big room in this budget for them. FII holdings in different sectors has been increased earlier it was in Insurance and some specified, but not like this. Direct taxes are left unchanged. Some of the key points and impacts between the people was given in simple points which is easy to understand by all.
Proposals and Impacts between Companies
Proposal 1 : Surcharge on corporate tax has been doubled from 5% to 10%
Impact 1 : Companies need to pay 1% extra more from their profit as tax. Due to this Rs6500 crore extra revenue expected by Government.
Proposal 2 :Dividend distributed to attract higher surcharge payers
Impact 2 : Listed firms need to pay Rs700 crore more and may hold back dividend payouts.
Proposal 3 : Banks to lend Rs7 lakh crore to agriculture, PSU banks to get Rs14000 crore as a new capital for Ladies owned bank.
Impact 3 : Loan Quality may suffer further, PSU banks will be in short of capital.
Proposal 4 : Companies Investing Rs100 crore or more to get tax break at 15% of the investment
Impact 4 : 200 listed companies are eligible as per the count last year. More may step up investments this year.
Proposals and Impacts between TaxPayers
Proposal 1 : Tax credit of Rs2000 for people earning less than Rs5 lakh
Impact 1 : 1.8 crore tax payers to save taxes of Rs3600 crore.
Proposal 2 : Additionally Rs1lakh interest deduction for home loans more than Rs25lakh
Impact 2 : For the first time home loan buyers can get upto 5.5lakh income exempted from tax
Proposal 3 : Persons with over Rs1 crore income to pay 10% surcharge. Only 42800 people are there earning more than 1crore income as per the survey said.
Impact 3 : Tax increaes of at least Rs2.9lakh per person.
Proposals and Impacts between Investors
Proposal 1 : STT on sale of equity futures reduced from Rs17 to Rs10 per lakh
Impact 1 : Tax savings of Rs500 crore. Options and cash traders still taxed at higher rates
Proposal 2 : CTT introduced at Rs10 per Rs1 lakh of trades
Impact 2 : Tax impact of Rs1000 – Rs1500 crore on non-agricultural commodity trades, this may impact in volumes
Proposal 3 : Pension funds/PFs allowed to invest more in ETFs and debit funds
Impact 3 : More likely to change in inflation
Proposal 4 : RGESS Income limit raised from Rs10lakh to Rs12lakh, tax breaks extended.
Impact 4 : Attempt to encourage stock market investments by wooing smaller investors