What does budget 2013-14 mean to you?

Mr. Chidambaram started narrating the budget on the note of falling global economy and its languishing impact on our domestic economy,  then profusely started doling money for the social sector.

Social-sector allocations (for Scheduled and backward classes, old people, minorities etc ) were expected in perspective of the oncoming 2014 general election.

To fare well in the elections sops were necessary but sinking economy was another concern. Rising inflation and twin deficits along with the fear of the downgrade by rating agencies constrained the FM from delivering a populist budget and as a result a insipid budget got delivered which is supposed to boost the economy in coming future.

Economy

FM expects India has got a potential to become a $ 5 trillion economy by 2025.Fiscal deficit and revenue deficit target for FY 14 has been set up at 4.8 % and 3.3% respectively. An amount of Rs. 14,000 crore shall be infused in PSU banks.

Taxation

·         There has been no change in the tax slab  for FY 2014. However, a tax credit (rebate) of Rs. 2000 shall be given for the tax payers falling in the Rs. 2-5 lakh income range.

·         For those who earn more than Rs. 1 crore shall be levied a surcharge of 10 %. This attempt was attributed as a step towards enhancing the Tax-to-GDP Ratio.

·         Inflation indexed bonds have been introduced in this budget to desist the people who have been investing in gold as a hedge against the inflation.

·         First time home loan buyers shall now avail an additional deduction for a housing loan up to Rs. 25 lakh. So now for the qualified home loan buyers total deduction will be Rs. 2.5 lakh.

·         TDS @ 1% on the property transactions above Rs. 50 lakh has been introduced

Capital markets

·         STT (Security Transaction Tax)on equity futures reduced to .01 % (earlier .017 %). Reducing STT was a long term demand from the capital market players.

·         CTT (Commodity Transaction Tax) has been introduced on on non-agro futures introduced at .01 %

·         FII can now trade in ETFs.

·         FII-FDI distinction shall bring more money into the markets

Rajeev Gandhi Equity Saving Scheme has been liberalized, Now  people with up to Rs. 12 lakh gross income can invest in this scheme earlier this was capped at Rs.10 lakh.

Now, first time investors shall be allowed to invest in this scheme for successive 3 years- i.e. 2 more years. Under RGESS, qualified investors can invest up to Rs. 50,000 in designated shares and MF schemes to become entitled for a deduction of Rs. 25,000.

 Entertainment

·         Set top boxes shall cost u more as custom duty has been increased. DTH experience becomes expensive

For our youth

·         Mobile above Rs. 2,000 shall become more expensive due to hike in the import duty from 1% to 6% ,

·         Dining out in AC restaurants shall now cost more as the same shall now attract the service tax. So be prepared to shell out more money at Domino’s and McDonald’s.

·         Custom duty on imported luxury bike has been increased to 75 % from earlier 60 %.

·         Excise duty on non-taxi SUVs hiked to 30 % from 27 %.

·         SED (special excise duty) on cigarettes hiked to 18 %

Foreign Travelers

·         Duty free gold import limit hiked  – Rs. 50,000 for male and Rs. 1,00,000 for females