highlight of amendment by finance act 2013
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(A) Direct Tax:-
1. No change in Income tax Slabs or Rates.
2. Tax credit of Rs 2000/- to resident individual in the first bracket between Rs 2 lacs to 5 lacs. In other words, Tax credit of Rs 2000/- to resident individual whose total income does not exceed 5 lacs. (Under section 87A)
3. Position of Surcharges:-
I persons other companies: (Individual, HUF, firms etc)
If Income > 1 cr.
Then surcharge rate is 10%
II In case of Companies:
(A) In case of domestic company (B) in case of companies other than domestic company
1. If the total income >1cr < 10cr. 1. If the total income >1cr < 10cr. 1.
Then, surcharge is 5% than, surcharge is 2 %
2. If total income >10 cr. 2. If the total income > 10 cr.
Than Surcharges is 10%-amendment than, surcharge is 5% - amendment
III In all other cases such as dividend distribution tax or tax on distributed income there is increase in current surcharges of 5% to 10%.
IV the additional surcharges will be in force for only one financial year i.e.2013-2014.
4. Amendment in the definition of section 2(14) i.e. capital assets & section 2(1A) i.e. agriculture land
Amendment is: certain properties including the agricultural land in rural area in India have been excluded from the definition.
From the assessment year 2014-15, Definition of Rural Area has been amended.
5. Section 10(10D) & Proviso in 80C (3A): There is amendment as well as newly insertion of proviso.
Amendment is: Limit of % of eligible premium under section 10(10D) for life insurance policies of persons
With disability or disease increased from 10% to 15% of the sum assured i.r.o polices issued on or after 01.04.2013.
Now if any Key man insurance policy once issued whether assigned later on will not be able to claim U/s 10(10D).
6. Section 32 AC –A newly inserted section: Investment allowance @ 15% for big companies investing over Rs 100 Cr. In Plant & machinery. Investment in FY 2013-14 & 2014-15 >100 cr. It will be in addition to depreciation.
7. Exemption from income tax to securitisation trusts under newly inserted section 10 (23DA), 10(35A) and chapter XIIE i.e. special provisions relating to tax on
distributed income.
8. Income of the shareholder on the account of buy back of unlisted share by the company will be exempt under section 10(34A).
further under the section 115 QA there are special provision relating to tax on distributed income of domestic company (unlisted) for buy back of share have been introduced. Buy back of shares will now attract tax @20%.
9. Newly inserted section 10(49): income of NATIONAL FINANCIAL HOLDING COMPANY-being the company set up by the central government of AY 2014-15 or earlier year shall be exempt from tax.
10. Newly inserted explanation to section 36(vii): Explanation 2 basically related for claiming bad debts written off. It is mainly related to banks.
11. Newly inserted section 36(xvi): commodities transaction tax paid as Expenditure. (Income should be included in PGBP income).
12. Newly inserted section 40(a) (iib): Disallowance of Royalty, licence fees, etc in case of state government undertaking.
13. Newly inserted section 43CA: it will be applicable in case of developers or builders.
For computing the business profit arising from transfer of land or building or both held as business assets (i.e. other capital assets) the provision of section 50C will be applicable now to determine the deemed sales realization and date of transfer shall be date of registration (not the date of agreement)until there in non cash consideration has been paid at the time of agreement.
14. Substituted section 56 (2) (vii) (b): Now the difference between the actual sales value & stamp valuation authority shall be income of purchaser subject to conditions. It has been introduced again which was withdrawn in the preceding year after protest.
15. Scope of deduction under section 80 CCG has been extended: Rajiv Gandhi equity saving scheme
Amendment: Income cap increased from 10 lacs to 12 lacs & now the same deduction shall be available for 3 successive years.
16. Amendment in following sections:
S.No. Section Amendment
1. 80D scope has been widen to include contributions made under any sch. notified
By CG/SG eligible for deduction u/s 80D.
2. 80G Now 100% deduction made to national children fund was allowed as deduction
3. 80GGB/80GGC Now cash donation shall not be allowed as deduction earlier it was allowed.
4. 80IA eligible date for the project in the power sector to avail of benefit under
80IA extended from 31.03.2013 to 31.03.2014.
5. 80JJAA Amendment proposed to restrict the deduction only in respect of workmen
employed in mfg activity carried out in a factory.
6. 80EE -Newly inserted section,
-Interest up to Rs 1 lacs-loan sanctioned after 01.04.2013 for the property of
Rs 40 lacs and loan 25 lacs or less and no other residential house owned.
-No double deduction will be allowed. Further this deduction is over and above
-The deduction of Rs 1.5 lacs allowed for self –occupied properties u/s 24.
17. Amendment in section 132B: Assessee can request to AO for release of the property of seized assets where there is no liability outstanding against the Assessee under the income tax act or wealth tax act. Advance tax will not constitute the amount of existing liability.
18. Amendment in section 139: ROI U/section 139 without paying the self assessment tax due thereon will now be treated a defective return.
19. Newly inserted section 194 IA: Payment on transfer of certain immovable property (land or building or both) other agriculture land in rural area in India, TDS @1% is applicable for the property of 50 lacs & above
20. Amendment in section 194 LC: Interest Income of a Non-Resident Investor to be taxed at the reduced rate of 5 per cent instead of the existing rate of 20 per cent and withhold Tax on such Income to be also at the Reduced Rate of 5 per cent. (Subscription of long term infrastructure bond by non resident /foreign company).
21. Newly inserted section 194 LD: TDS on interest on bonds/government securities which is payable to foreign institutional investor or qualified foreign investors.
22. Amendment in section 271FA: Penalty for failure to furnish AIR. Now penalty will be 500 per day after elapse of period of time given under notice issued under section 285 BA. Earlier there was only one penalty of Rs 100 per day but now there are two penalties. But this penalty is effective from 01.04.20104.
23. Amendment under the wealth tax: There are two amendments in the wealth tax
I. Definition of agriculture land
II. Electronic filling of annexure less return of net wealth.
24. Amendment to section 142: scope of special audit under section 142(2A) has been widened. AO can now order the special audit not only for the reason of complexity in the accounts but also for some prescribe purpose e.g. volume of accounts.
25. Explanation 1 has been substituted under section 10(23FB): venture capital company, venture capital undertaking & venture capital fund. Income not to be included in total income.
26. Amendment in section 153 & 153B: time limit for completion of assessment –period of limitation shall exclude time wherein assesses challenged the order of special audit u/sec 142(2A) before a court than commissioner receiving the court order.
27. Amendment in section 167C & 179: liability of partners/directors of LLP/PVT Company in liquidation. Explanation has been inserted to counter the judicial view. TAX DUE- will include penalty, interest or any other sum payable under this act & not only the income tax only.
(B) INDIRECT TAXES:-
{I} CUSTOMS: No change in the peaks rate of basic custom duty of 10% for non agriculture products
1. Baggage Rules are being amended to,-
(i) raise the duty free allowance in respect of jewellery for an Indian passenger who has been residing abroad for over one year or a person who is transferring his residence to India from Rs.10,000 to Rs.50,000 in case of a gentleman passenger and from Rs.20,000 to Rs.1,00,000 in case of a lady passenger.
(ii) Raise the duty free allowance for crew member of vessel/aircraft from Rs.600 to Rs.1500.
2. Proposals involving changes in rates of duty:-
(I) Basic customs duty is being reduced from 7.5% to 5% on 20 specified machinery for use in leather and footwear industry.
(II) Basic customs duty on steam coal is being increased from Nil to 2% and CVD from 1% to 2%.
(III) Basic customs duty on bituminous coal is being reduced from 5% to 2% and CVD from 6% to 2%.
(IV) Basic customs duty is being reduced from 10% to 2% on pre-forms of precious and semi-precious stones.
(V) Basic customs duty on Set Top Boxes for TV is being increased from 5% to 10%,
(VI) Basic customs duty on raw silk (not thrown), of all grades is being increased from 5% to 15%.
(VII) Basic customs duty is being reduced from 7.5% to 5% on textile machinery & parts.
(VIII) 1) Full exemption from basic customs duty is being provided to lithium ion automotive battery for manufacture of lithium ion battery packs for supply to the manufacturers of hybrid and electric vehicles.
(IX) Time period of exemption (Nil BCD, CVD of 6% and Nil SAD) for the specified parts of electric and hybrid vehicles is being extended by 2 more years up to 31st March, 2015.
(X) Basic Customs Duty on yachts and motor boats is being increased from 10% to 25%.
(XI) Time limit for consumption of imported goods by ship repair units is being extended from 3 months to 1 year.
(XII) Time period for consumption/installation of parts and testing equipments imported for maintenance, repair and overhaul (MRO) of aircrafts by units engaged in such activities is being extended from 3 months to 1 year.
(XIII) Presently, the basic customs duty exemption is available to parts and testing equipments for maintenance, repair and overhaul of aircrafts. This exemption is now being extended to parts and testing equipments for maintenance, repair and overhaul of aircrafts and parts thereof.
(XIV) Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts, and similar vessel increased.
{II} CENTRAL EXCISE LAWS:-No change in normal rate of 12% for excise duty & service tax
PART A: CHANGES IN DUTY STRUCTURE
[w.e.f. 1-3-2013]
|
Tariff Heading |
Product |
Old Rate |
New Rate |
Effect |
|
72 |
Stainless steel pattis or pattas – Compounded Levy Scheme |
Rs. 30,000 per cold rolling machine, per month |
Rs. 40,000 per cold rolling machine, per month |
1/3rd Hike [ Not. No. 5 / 2013-Central Excise] |
|
85 |
Mobile handsets including cellular phones having retail sale price more than Rs. 2000/- |
1.00% |
6.00% |
6 times Hike [Not. No. 6/2013 and 12/2013-CE] |
|
85 |
Mobile handsets including cellular phones having retail sale price upto Rs. 2000/- |
1.00% |
1.00% |
No change [Not. No. 6/2013 and 12/2013-CE] |
|
39 |
Urea formaldehyde resins or binders captively consumed within the factory of production, in the manufacture of particle board in respect of which exemption is claimed under notification No. 49/2003-C.E. and 50/2003-C.E. both dated 10-6-2003 |
Exempt |
Exempt |
No change [Notification No. 7/2013 and 12/2013] |
|
61, 62 and 63 (except 6309 00 00 and 6310) |
All goods of cotton, not containing any other textile material |
Such goods bearing a brand name or sold under a brand name were not eligible for exemption. |
Exemption has been extended to such branded goods. |
Textile Industry to cherish restoration of position prior to 1-3-2011 [Not. No. 8/2013-CE] |
|
61, 62 and 63 (except 6305, 6309 00 00 and 6310) |
All goods – Textile and Textile Articles |
Such goods bearing a brand name or sold under a brand name were not eligible for exemption. |
Exemption has been extended to such branded goods. |
Textile Industry to cherish restoration of position prior to 1-3-2011 [Not. No. 11/2013-CE] Ready made branded garments to cost less. |
|
11 |
Tapioca starch manufactured and consumed captively in the manufacture of tapioca sago (sabudana) |
6.00% |
NIL |
Exempt |
|
1517 90 20 |
Peanut butter |
Nil |
Nil |
Tariff heading 1517 90 20 omitted. Now it will be classifiable under Tariff heading 2008 11 00 [Finance Bill, 2013 (Clause 92 read with the Sixth Schedule) & Not. No. 12/2013-CE] |
|
19 |
Tapioca sago (Sabudana) |
Liable to duty |
NIL |
Exempted [Not. No. 12/2013-CE] |
|
24 |
Category : Budget |
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