BUDGET 2013 – EK DHOKHA

 

 

Dear Friends,

The Budget 2013 is a fraud to the common and innocent people of India.  I had already provided you the major highlights of Budget 2013 on the same date of the budget within 2 hours. The link of the same is given below:

http://taxbymanish.blogspot.in/2013/02/major-highlights-of-india-union-budget.html

For me the budget first looks more than a neutral as it had contains few incentives . but now as we are getting deeper and deeper and found that the incentives provided are nothing but just a mirage in the desert and you could not  gain more from this, but definitely loose.

I had listed down the few proposed amendments which are not in the favour of the society. 

 

SN	Proposed Amendment	Author Remarks
1	Withholding tax on Royalty payments to non –residents increased to 25%.	The countries having DTAA will still enjoy the treaty benefit subject to the condition that you must obtain their PAN and TRC. In case you  fail to obtain TRC, the rate is now 25% still DTAA is there and in case no PAN, then rate is 20 %. Further countries like Hongkong & Argentina, where India don’t have any DTAA , there 25% WHT is applicable.
2	Additional investment allowance @ 15% for acquisition of new plant & Machinery purchased of Rs. 100 Cr. or more after 1.4.2013 and before 31.3.2015	In the recession time, how many industry able to buy P&M more than Rs. 100 Cr. The section is only benefitting Super rich companies and not  to others.
3	No Change in Income tax slabs except Rs. 2000/- tax credit in case taxable income below Rs. 5 Lakhs	There was no need to provide additional tax exemption of Rs. 167/- p.m.
4	Additional deduction of Rs. 1 Lakh is allowed in case of acquisition of first house property whose value is less than Rs. 40 Lakhs and loan amount is less than Rs. 25 Lakhs.  Further, unabsorbed deduction can be carried forward to next year	If deduction u/s 80EE claimed, then assessee cannot  take deduction under other sections i.e Rs. 1.5 Lakhs u/s 24.  Thus, assessee will take deduction u/s 24 and hence section 80EE is a vague incentive.
5	TDS @ 1% on purchase of property of more than Rs. 50 Lakhs except agricultural land.	Putting common man under the preview of compliances of TDS.
6	Section 43CA inserted which is similar to section 50C	This will effect real estate companies business
7	Section 56(2) amended to include inadequate consideration along with no consideration.	This have a impact on common man who booked the home under constructions and wait for 2-3 years for their completion
8	Reduction in abatement rate to 70% from 75%  for under construction apartments having carpet area of 2000 sq feet or more or value exceeds Rs. 1 crore	This will increase the cost of residential house although there is no element of extra services.
9	Levy of service tax on all air conditioned restaurants	This will increase the cost of outside eating.
10	Introduction of one-time scheme called ‘Voluntary Compliance Encouragement Scheme” compliance of service tax.	Of no use, in case you had already served with show cause notice. Further, exemptions from other law is not granted.
11	Public vehicle parking covered under service tax	This will increase the parking cost of common man.
12	Amendment made under section 40A(2b)	Companies run by state government now face the difficult time due to this.

 

 I hope that you will able to understand the harm caused by the above tax amendments. However, in case you need more detail for any specific provision, please mail me at taxbymanish@yahoo.com  and also visit my blog at http://taxbymanish.blogspot.in/// for latest updates on taxes.

Thank you.