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Chidambaram's marginal rebate to low-income taxpayers

Thursday February 28, 2013 12:52:24 PM, IANS

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New Delhi: Finance Minister P. Chidambaram Thursday proposed a tax cut of Rs.2,000 for people earning an annual income of between Rs.200,000 and Rs.500,000 and said anything beyond that was not possible given the current circumstances.

Presenting the national budget for 2013-14, the finance minister said any hike in the exemption limit for direct tax that is paid by individuals would take millions out of the tax net and was neither a desirable proposition, nor feasible.

Accordingly, he proposed a Rs.2,000 tax credit for those in the first slab.

"This measure will benefit 1.8 crore (18 million) tax payers," he said, adding that this would entail an outgo of Rs.3,600 crore ($650 million) to the exchequer.

Chidambaram said the tax-GDP ratio in the country had slipped to 5.5 percent for direct taxes and 4.4 percent for indirect taxes. "Our tax-GDP ratio is one of the lowest in the world. We should reclaim 11.9 percent tax-GDP ratio in the short term."

For the affluent, the finance minister took the cue from what was proposed as the "super rich tax" by Wipro chairman Azim Premji, and said a surcharge of 10 percent was proposed on the those earning more than Rs.1 crore per annum.

"This surcharge will be for one year," the finance minister said, adding there were some 42,800 people who fell in that bracket. "I am sure, there is a little bit of Azim Premji in everyone and this additional burden will be for one year."

 

Budget Higlights

Modified law on GST to be tabled during budget session

Import duty on high-end vehicles raised from 75 percent to 100 percent

Concessions for encouraging MRO (maintenance repair overhaul) sector

Excise duty on cigarettes to be increased 18 percent

No change in customs duty on non-agricultural products

No change in service tax of 12 percent

Modified law to prevent tax avoidance to come into effect April 1, 2016

100 percent tax deduction for contributions to National Children's Fund

Education cess to continue at 3 percent

11 lakh people have benefited from direct cash transfers; scheme to be rolled out across the country during UPA-2 term (May 2014)

Property transactions skewered; TDS of one percent where transaction exceeds Rs.50 lakh

Tax on mutual fund redemptions reduced from .25 percent to .001 percent

No revision of personal income tax slabs; relief in first bracket through tax credit of Rs.2,000 for earnings up to Rs.5 lakh

Ten percent surcharge on income exceeding Rs.1 crore a year; only 42,800 people have declared such income

Tax Administrative Reforms Commission to be set up

Collective responsibility to ensure dignity and safety of women; recent incidents have cast a dark shadow; stand in solidarity with our girl children and women; will keep them safe and secure

Rs.1,000 crore allocated for establishing Nirbhaya Fund

Defence allocated Rs.2 lakh 3,672 crore

Cities to be encouraged to promote waste to energy projects

Low interest funds to be provided for promoting clean energy

Rs.800 crore provided to promoting wind energy

Two new ports to be set up in West Bengal and Andhra Pradesh to add 100 million tonnes handling capacity

Gas handling terminal at Dabhol in Maharashtra to be fully operational during 2013-14

State governments urged to sign restructuring plans with electricity discoms

Tax-free infrastructure bonds of Rs.50,000 crore to be issued

Textile ministry allocated Rs.50 crore for establishing apparel parks

Handloom sector allocated Rs.96 crore to benefit 150,000 weavers

Infrastructure debt funds to be encouraged

Regulator to be appointed for road projects; 3,000 km of road projects to be awarded in first six months of 2013-14

Incentive allowance of 15 percent over and above permitted depreciation to those investing over Rs.100 crore in infrastructure projects

Rajiv Gandhi Equity Scheme to be liberalised

Seven new cities identified along Delhi-Mumbai Industrial Corridor

Preliminary work begun on Bangalore-Mumbai Industrial corridor

Foodgrain production during 2013-13 estimated at 250 million tonnes

Rs.500 crore allocated for promoting crop diversification

Rs.200 crore allocated for promoting nutrient-rich crops

Rs.50 crore allocated for farmer-producer organisations

National Livestock Mission to be launched with allocation of Rs.307 crore

Hope parliament will pass food security bill; Rs.10,000 crore allocated for initial expenditure on implementation

Human resource development ministry to get Rs.65,867 crore

Rs.13,250 crore allocated for midday meals scheme

Rs.17,700 crore allocated for Integrated Child Development Scheme

Drinking water and sanitation ministry allocated Rs.15,260 crore

Allocation of rural development ministry allocation raised by 46 percent to Rs.80,294 crore; Rs.33,000 crore for rural jobs scheme

Budget expenditure for 2013-14 at Rs.16 lakh 65,297 crore; plan expenditure at Rs.5 lakh 55,224 crore

Rs.41,000 crore for Scheduled Caste plan

Rs.97,000 crore for women's development

Rs.110 crore for department of disabilities

Rs.37,330 crore for health ministry

Average growth during UPA-1 was 8 percent; high growth not a novelty

Current account deficit a worry because of high oil and gold imports

Will need $75 billion to finance current account deficit

Need to encourage FDI in consonance with economic priorities

WPI inflation down to 7 percent; food inflation worrying.

 




 

 

 

 





 

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