Budget presented can be described as
solid, sound & credible. Not a spectacular one, no fireworks, not an
election budget in the sense of populist giveaways, but yes, a subtle election
budget- to bring inflation down, stimulate growth, make sure that foreign investment
comes in & keeps rupee strong so that CAD (current account deficit is
fixed. It aims to satisfy the investment community, the voters and also
promotes the notion that India is turning around. It is, therefore, not an
austerity budget. The importance of stability in tax rates is well highlighted
& the surcharge on the super rich for one year will be entirely acceptable.
The budget seems to be positive for the markets and for the economy.
SALIENT POINTS
- FY13 growth rate pegged at 5% and FY14
growth pegged at 6.1-6.7%
- Capital Markets
- Proposed launch of inflation indexed
bonds;
- RGESS modified to include mutual
funds and investments in three consecutive years; RGESS income limit
raised to Rs. 12 lakhs;
- STT reduced and introduction of
commodities transactions tax
- Fiscal Deficit: To be reduced to 4.8%
in FY14 from the revised 5.2% in FY13
- Taxation
- No change in taxation slabs
or tax rates
- Tax credit of Rs. 2000 for
individuals with total income up-to Rs. 5 lakhs
- Surcharge of 10% on
individuals with annual taxable income of over Rs. 1 crore
- Surcharge increased to 10%
from 5% on companies with annual taxable earnings of over Rs. 10 crore
(5% for foreign companies)
- Surcharge on dividend
distribution tax raised to 10% from 5%.
- Addl. Rebate of Rs. 1
Lac (over and above Rs. 1.50 Lacs presently) for Interest on 1st Housing
Loan for a House Value up to Rs. 25 Lacs.
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