Budget

The aim of Budget 2013-14 aptly addresses the need of the hour i.e., to accelerate growth through sustainable development and inclusive growth. The tax proposals are also in tandem with this overall aim of the budget, proposed to be achieved by focusing on key areas, such as bringing in stability in tax regime, ensuring a non-adversarial tax administration, curbing tax evasion and increasing voluntary compliance. Also, the budget reinforces its faith on the progressive system of taxation, by proposing levy of surcharge on the affluent, higher taxes on luxury & sin goods, provision of additional deductions to specified categories which do not encompass the rich (like additional interest on housing loans upto a specified limit, total income cap of Rs. 12 lakhs for new investors to avail the benefit of deduction of investment in Rajiv Gandhi Equity Savings Scheme), lower abatements for service tax in case of houses of high value.

The stability in tax regime is to be achieved by maintaining status quo with respect to basic exemption limit and income-tax slabs. The rates for all the three central indirect taxes, namely, excise duty, customs and service have also not been tinkered with. The proposals to continue the benefits relating to deduction for new investors investing in equity market as well as the lower rate of tax on dividend received from foreign companies and the proposal to make minimum addition in the negative list of services introduced last year are in line with this objective. Further, another notable feature in ensuring stability is that no major retrospective amendment has been proposed this year.