Budget 2013-14 for Common Man: No change in tax rates or slabs

There will be no change in tax rates or slabs for FY14, Finance Minister P Chidambaram said in his Budget speech. However, he announced a tax credit of Rs 2500 for Rs 2-5 lakh tax payers bracket.

Chidambaram said that only 42,800 people in India last year declared a taxable income over Rs 1 crore. Therefore, he levied a surcharge of 10% on people earning a taxable income of Rs 1 crore and above.

The RGESS will be liberalised to enable the first time investor to invest in MFs and listed shares in three successive years, he added. The limit for investors wanting to invest in RGESS too has been raised from Rs 10 lakh to Rs 12 lakh.

Infrastructure Debt Funds will be encouraged to boost the economy, Finance Minister P Chidambaram said, adding that doing business in India must be seen as easy and friendly.

Chidambaram has allocated Rs 500 crore to start programme of crop diversification.

He has also given Rs 80,194 crore to Ministry of Rural Development in Budget 2013.

Giving the emphasis on education, Chidambaram said Budget 2013 will allocate Rs 65,867 crore to the HRD ministry. My budget’s overarching goal is to create opportunities for our youth, he said.

More than the fiscal deficit, Chidambaram said his greater worry is the current account deficit.

In his Budget speech, he said the ‘passion for gold’ is one of the contributing factors.

The Economic Survey 2013 has recommended focusing on curbing imports in order to control a ballooning current account deficit (CAD). According to the survey oil prices should be more market determined to reign in the CAD.

The survey says that curbing gold imports will help the government reign in the deficit and has noted that the room to increase exports in the short run is limited.

While the government has “thrown sand in the wheels” by raising the tariff on gold from 4 per cent to 6 per cent in order to discourage imports and tried to unlock passive gold holdings through gold loans, gold purchases are likely to come down primarily when households see attractive alternative investment avenues, it added.

Over the last few months, the government has taken several steps to boost dollar inflows like de-regulating NRI deposit rates, relaxing ECB norms, increasing FII debt limits, liberalisation of FDI and postponement of GAAR and higher duties on gold.

Meanwhile, high import of gold is adding to the CAD despite efforts by the government to check import of the precious metal. Gold accounts for second largest import in value terms after oil.

Source: http://economictimes.indiatimes.com/