Economy
- FM says Current Account Deficit (CAD) and Food Inflation is a big concern for India. Foreign investment are must to fill the deficit.
- Doing business in India should be easy.
- Fiscal Deficit to be seen at 4.80% versus 5.2% previous year.
- Revenue Deficit seen at 3.3%
Infrastructure
- Infrastructure debt funds for infrastructure development of the country.
- Allow to issue Tax-free bonds upto Rs.50,000 Crore in FY 2013-14
Banking
- All PSU bank branches to have ATMs by 31/3/2014.
- To introduce first public sector bank for women, with initial capital of Rs.1,000 Crore by October,2013.
- Additional deduction on interest of Rs.1 lakh will be allowed in the first year on home loan upto Rs.25 lakhs for first residential property. Applicable for home loans availed between 1/4/2013 to 31/3/2014.
- Post Office will offer Core Banking Solutions (CBS).
Insurance
- Insurance companies can open branches in Tier II cities without IRDA approval.
- Banks can act as Insurance Brokers
- All small cities to have one branch of LIC and any one PSU General Insurance Company.
- Rashtriya Bima Bachat Yojna extended for rickshaw, taxi drivers, sweepers, etc.
- KYC from banks sufficient for Insurance.
Capital Markets
- FM distinguished Foreign Institutional Investor and Foreign Direct Investment is distinguished. Stake of less than 10% in a domestic company will be considered Foreign Institutional Investor (FII) and for stake more than 10% will be considered Foreign Direct Investment (FDI).
- FIIs to be allowed to trade in exchange traded currency derivatives.
- Debt segment to be start soon on the Stock Exchange.
- Exchange Traded Fund (ETF) to be allowed for Pension and Insurance investments.
- Mutual Fund Distributor will be allowed to become member of stock exchange for ETF, Debt Fund and Asset Backed Securities.
- Inflation Protected Bonds / Certificates to be introduced.
Taxation
Direct Tax
- Tax slabs for individuals and HUF’s to remain the same. There is only an additional credit of Rs.2,000 for persons falling under first tax slab i.e. income Rs.2,00,001 to Rs.5,00,000.
- Rajiv Gandhi Equity Scheme (RGESS) continues for first time investors in stock market, with increase in income limit to Rs.12 lakhs and will be eligible for the scheme for 3 years.
- 10% Surcharge on individual with income more than 1 crore.
- 10% Surcharge on domestic companies with income more than 10 crores.
- 10% Surcharge to be charged on Dividend Distribution Tax (DDT).
- This additional surcharge is applicable only for 1 year
- 15% tax on dividends received from foreign subsidies. No DDT on dividends distributed from this income.
- TDS @ 1% on value of transfer of property, valuing more than Rs.50 lakhs.
Securities Transaction Tax (STT)
Equity Futures
– 0.01%
Equity shares,
ETFs and MF units – 0.001%
No change in
STT on other Derivatives instruments
Commodity
Transaction Tax (CTT) at 0.01% on trading in non-agricultural
commodities.
Direct
Tax Code is still work in progress.
Indirect Tax
- No change in Service tax, it stands @ 12.36%.
- Increase in import duty on imported luxury cars to 100% and imported bikes with more than 800 CC to 75%.
- Exemption on Gold Import Duty upto Rs.50,000 for men and upto Rs.1 lakh for women.
- Excise Duty on Cigarettes and Cigars is increased to 18%
- Service Tax on all air conditioned (AC) restaurants.
