Budget 2013: Chidambaram offers minor sops to income tax payers, targets super-rich

Feb 28 2013, 21:25 IST
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FM aims at higher growth rate for inclusive, sustainable development, manufacturing revival. (Reuters) FM aims at higher growth rate for inclusive, sustainable development, manufacturing revival. (Reuters)
SummaryFM aims at higher growth rate for inclusive, development, manufacturing revival.

GDP and effective revenue deficit to zero.

Unusually, the Budget does not make any economic growth rate prediction for the current as well as next fiscal.

Presenting his eighth budget, the first after coming back to Finance Ministry last year, Chidambaram brought down the subsidy for 2013-14 to Rs 2,31,084 crore from Rs 2,57,654 crore.

He raised the target from disinvestment proceeds to over Rs 55,000 crore from current year's revised estimate of about Rs 24,000 crore.

In a bid to revive manufacturing, the Finance Minister announced the grant of investment allowance at the rate of 15 per cent to manufacturing companies that invest more than Rs 100 crore in plant and machinery between April 2013 and March 2015. This will be over and above currently allowable depreciation.

The Budget proposes three measures to promote household savings. The income limit for Rajiv Gandhi Equity Saving Scheme for first time investors is being raised from Rs 10 lakh to Rs 12 lakh.

To wean away investments in securities like gold, instruments such as inflation indexed bonds will be introduced to protect savings from inflation.

In order to encourage infrastructure sector, Chidambaram said the government will allow certain companies to raise tax free bonds up to Rs 50,000 crore and encourage infrastructure debt fund.

The Budget has increase allocation for education to Rs 65,867 crore, on health and family welfare scheme to Rs 37,330 crore, backward region grant fund to Rs 11,500 crore, drinking water and sanitation Rs 15,260 crore and on Jawarhar Lal Nehru Urban Renewal Mission to Rs 14,873 crore.

HIGHLIGHTS

*No change in income tax slabs

*Relief of Rs 2,000 for tax payers in tax bracket of Rs 2-5 lakh

*10 pc surcharge on persons with taxable income of over Rs 1 crore

*Tobacco products, SUVs and mobile phones to cost more

*Income limit under Rajiv Gandhi Equity Savings Scheme raised to 12 lakh from Rs 10 lakh

*First home loan of up to Rs 25 lakh to get extra interest deduction of up to Rs 1 lakh

* Duty free limit of gold import increased to Rs 50,000 for male passengers and Rs 1 lakh for female passengers

*India's first women's bank to be set up by October

* Concessional six per cent interest on loans to weavers

* Rashtriya Swasthya Bima Yojana benefit extended to rickshaw pullers, auto and taxi drivers, among others

* 'Nirbhaya Fund' of Rs 1,000 crore to empower women and provide safety in the wake of Delhi gang-rape incident

*Fiscal deficit for 2013-14

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