Budget Highlights 2013-14

The Union finance minister Chidambaram presented the Budget for the year 2013-14. Following are the key points having direct/indirect relevance to the IT industry:

DIRECT TAX

• No change in slabs and rate for personal income tax.
• Tax credit of Rs 2000 to be provided to every person to having income of up to Rs 5 lakh, this will benefit 1.8 crore people.
• 5 to 10% surcharge on domestic companies whose taxable income exceeds Rs 10 crore.
• Direct Taxes Code (DTC) bill to be introduced in current Parliament session.
• Education cess to continue at 3%.
• Surcharge of 10% for individuals whose taxable income is over Rs 1 crore.
• A company investing Rs 100 crore or more in plant and machinery in April 1, 2013 to March 31, 2015 will be allowed 15 % investment deduction allowance apart from depreciation.

INDIRECT TAX

• No change in peak rate of customs duty for non-agriculture products.
• No change in basic customs duty rate of ten % and service tax rate of 12 %.
• Vocational courses offered by state-affiliated institutes to be exempted from services tax.
• Duty on mobiles above Rs 2,000 raised from one to six percent, based on their maximum retail prices.

OTHER

• Low interest rate funds to be provided from Clean Energy Fund for green projects for a period of 5 years.
• Generation-based incentives to wind energy projects reintroduced, Rs 800 crore provided for the purpose to Ministry of New & Renewable Energy.
• Rs 532 crore to make post offices part of core banking.
• We will evolve schemes for cities to take up waste to energy projects.
• Small and medium companies to be allowed to listed on MSME exchange without making a public offer. 
• Rs 80,194 crore allocation for Ministry of Rural Development in 2013-14. About Rs 33,000 crore for MGNREGA.
• PSU banks to have ATMs at all their branches by March 31, 2014.
• Small and medium companies to be allowed to listed on MSME exchange without making a public offer.

Contributed by Anil Agrawal, CA and alumni of Ernst & Young