Tax related updates In budgets

ü  Good news for home loan takers. People taking a home loan in 2013-14 for an amount up to Rs 25 lakh will be allowed an additional deduction of Rs 1 lakh.

ü  Budget 2013: Home loan borrowers allowed additional deduction of Rs 1 lakh.

ü  FM: A company investing Rs 100 crore or more in plant and machinery in April 1, 2013 to March 31, 2015 will be allowed 15 per cent investment deduction allowance apart from depreciation.

ü  FM: No revision in the tax slabs

ü  Surcharge of 10% on Rs 1 crore plus income earners

ü  Budget 2013: No plans to revise direct tax rates

ü  Budget 2013: Imposes 5-10% surcharge on local companies income above Rs 10 crore.

ü  Budget 2013: Education cess to continue

ü  Immovable Property transaction: TDS of 1% to be levied on transactions above Rs 50 lakh

ü  STT rates cut on equity futures to 0.01%

ü  Budget 2013: Direct Tax Code remains work in progress

ü  Budget 2013: Modified GAAR to come into effect from Apr, 1 2016

ü  Budget 2013: No change in peak basic customs duty

ü  Investor with stake of 10 per cent or less will be treated as FII; any stake more than 10 per cent will be treated as FDI

ü  Small and medium companies to be allowed to listed on MSME exchange without making a public offer

ü  Budget 2013: Higher customs duty on set top boxes

ü  Budget 2013: To levy 2% customs, CVD on coal imports

ü  Excise duty on SUVs raised from 27% to 30%. Will not apply to SUVs registered as taxis

ü  Budget 2013: Exempts imported ships and vessels from duty

ü  Budget 2013: Duty cut on leather, leather good machines

ü  Mobiles phones enjoy a concessional excise duty of 1%, that will not change. For phones priced at more than Rs 2000, I propose to increase duty to 6%

ü  Excise duty raised by18% for cigarettes

ü  Service tax to be levied on all air conditioned restaurants

ü  FM: Increase in import duty on high end motor vehicles from 75% to 100%; and on motor cycles from 60% to 75%

ü  Luxury imported items to be cost more

ü  Cut abatement rate on expensive homes to 75%

ü  No revision in tax slabs, Tax credit of Rs 2000 for income upto Rs 5 lakh

ü  No revision in tax slabs, Tax credit of Rs 2000 for income upto Rs 5 lakh

ü  One time amnesty scheme for service tax defaulters

ü  FM in his budget 2013 speech said that an additional 10% surcharge would be levied on those whose taxable income is above Rs 1 cr per annum.

ü  No duty on import of ships, vessels

ü  Budget 2013: FM announces to levy 0.01% CTT on non-agro commodity trades: FM in his budget speech announced to levy a commodity transaction tax of 0.01% on all non-agro commodity trades such as gold, silver.

ü  Investor Protection Fund set up by depositories will be exempt from tax:

ü  Contributions made to central and state government health scheme eligible to tax benefit

ü  Gold duty free limit raised to Rs 50,000 for men and to Rs 1 lakh for women travelers

ü  Specific excise duty on cigarettes and cigars raised by 18 per cent

ü  CTT of Rs 10 per lakh on non–agri commodities to impact trade adversely

ü  6% duty hike on all mobile phones above Rs 2000

ü  Donations to National Children's Fund will get 100% tax exemption

ü  Higher tax on royalty paid

ü  Tax residency certificates alone not sufficient for treaty benefit

ü  Budget 2013: FM exempts Securitisation Trust from income tax

ü  Mauritius tax route comes under threat: The Mauritius tax route has come under threat with the budget stipulating that the tax residency certificate will be necessary but not sufficient for availing of the tax benefit. This has diluted the famous circular of CBDT which had been uphled by the Supreme Court in the Azadi Bhachao case. The implication of the amendment is that the tax officer can carry out further scrutiny. This could have the same chilling efffect on the markets as was the case with GAAR and Vodafone in the 2012 budget.

ü  Budget 2013: Gem and Jewellery sector heaves a sigh of relief, happy over reduction of duty on gemstones: Finance minister's decision to reduce the import duty on pre-forms of precious and semi-precious stones from 10% to 2% in the Union Budget 2013-14 has brought much cheer to the gem and jewellery industry.

ü  Here is a look at 12 important announcements that will impact the middle class: 

1) You can look forward to more tax-free bonds in the coming days, as some institutions are expected to raise around Rs 25,000 crore via tax-free bonds in 2012-13. The finance minister has also permitted some institutions to issue tax free bonds in 2013-14 up to Rs 50,000 crore.

2) The hike in income threshold to invest in Rajiv Gandhi Equity Saving Scheme ( RGESS) is good news for new investors to the stock market. Now, those with income of up to Rs 12 lakh can invest in (RGESS). Earlier only those with income of Rs 10 lakh and less could invest in the scheme.

3) If you are taking a housing loan of less than Rs 25 lakh this year, you can claim additional tax break of Rs 1 lakh on interest payment. This is in addition to Rs 1.5 lakh permitted currently.

4) If you have been worried about inflation eating into your long term savings, you should wait for inflation indexed bonds and inflation indexed national security certificates. The details of these instruments will be announced shortly.

5) If you are living in a tier II city and find it difficult to find an insurer near your place, the budget has some good news for you. Insurance companies can open officers in tier II cities without prior permission from Insurance Regulatory and Development Authority.

6) Last year, the finance minister had announced that for life insurance premium to be eligible for deduction under section 80C, the premium should not exceed 10% of the sum assured. This Budget has raised this cap to 15% for policyholders with disabilities. They stand to benefit as life insurers typically charge a higher premium citing higher risk.

7) The finance minister has announced a tax credit of Rs 2,000 for individuals with income of less than Rs 5 lakh. In simple terms, if your tax payable amounts to Rs 10,000, your liability will be limited to Rs 8,000.

8) Securities transaction tax is reduced. STT on mutual fund (MF) and exchange traded fund (ETF) redemptions at fund counters is slashed to 0.001% from 0.25%; STT on MF/ETF purchase and sale on exchanges is reduced from 0.1% to 0.001%, only on the seller.

9) If you are derivative trader in the equities market, you should be happy as STT on futures has come down 0.017% to 0.01 % and if you are derivative trader in commodities market, you have to pay CTT at the same rate applicable to equity futures. There was no CTT earlier.

10) If you are going abroad, here is some good news for you. Duty-free shopping limit is hiked to Rs 50,000for a male passenger and Rs 1 lakh for a female passenger.

11) Mobile phone prices to go up; the excise duty is hiked to 6% on handsets which costs more than Rs 2,000

12) If you are a service tax evader, you should make use of the new voluntary Compliance Encouragement Scheme announced in the budget. You can file a declaration of service tax due since 1.10.2007 and make the payment in one two instalments before prescribed dates. You don't have to pay interest and penalty and other consequences will be waived.