Union Budget 2013 : Summary and analysis
The expectations of industry, politicians, Policy makers and the populace at large were at peak when the finance minister rose to present the Union Budget 2013 and the finance bill. Gone was the talk of “lizard eaters” and was replaced by talks of stability, non-adversarial tax regimes and a huge vote towards the inevitability and the need for foreign investment. While the Finance minister made sounded the right notes, did he deliver?
Our opinion is that this budget was a non event. There were some positive steps for start-ups and small enterprises but not much of consequence for foreign investors. There was a few mis-steps such as the increased withholding rates for Royalties and FTS and the confusion over the applicability of circular 789 and the validity of TRS for foreign investors. Credit has to be given to the finance ministry for quickly clarifying and sorting out such confusions.
There was little cheer for the smaller tax payers, tax incentives were announced for first time house buyers and there was a Rs 2000 tax credit for those whose income is below Rs 5 lakh. The inclusion of Mutual funds in RGESS also should provide an impetus to the stock market.
All eyes are now on 2014, the tone and nature of expenditure related items has clearly indicated that this is, infact, an election focussed budget.
We have provided below a comprehensive analysis of budgetary proposals as announced by the finance minister. We hope this shall be useful to you and your business.
We look forward to your queries and comments.
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