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Direct and indirect budget 2013-14

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Siva Sankari
Siva Sankari

The document discusses various aspects of taxation including definitions of direct tax, indirect tax, and different tax classifications. It provides details on personal income tax slabs in India and changes made in the 2013-14 budget. It also summarizes other major direct taxes such as a surcharge on high incomes and corporate tax changes. For indirect taxes, it mentions no changes to customs duty rates but increases on luxury items and reductions on others. The impacts highlighted are no changes to income tax slabs, a Rs. 2,000 tax credit, and paying more for dining out and mobile usage while import duty on precious stones is reduced.

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28th Feb 2013
What is a budget? A Plan A Limit A Schedule A Reality Check An Allocation
Budget a definition A planned expression of money For a defined activity Shows; Income & Expenditure Total estimated costs Defined period of time
More definitions Budget = Quantitative expression of a plan Forecasting Budgets involve Planning & Planning & Control Control & Evaluation
Budgeting in Context Historic Plus Effects of Information Outside Environment Forecasting & Planning Evaluating Performance Current Operating Controlling Data operations
A budget helps Want Need Budget can
Types of budgeting There are three common budgeting methods: Top-down Budgeting Bottom-up Budgeting Iterative Budgeting
Top Down Budgeting Top-Down Budgeting is the term given to a budgeting process based on estimating the cost of higher level tasks first and using these estimates to constrain the estimates for lower level tasks
Bottom Up Budgeting Sometimes called Zero Based Budgeting Bottom-up budgeting begins with identifying all the constituent tasks that are involved in implementing a project and working out the resources and funding required by each
Iterative Budgeting Iterative to repeat or do again A combination of top-down and bottom-up budget building Higher project level estimated (top down) Lower level costed (bottom up) The two costs negotiated and reconciled
Budgetary Control The ability to control anticipated expenditures for your project using a project cost budget.
Features of an effective budget 1. Accurate forecasting 2. Based on organisational goals 3. Information is timely and accurate 4. Formed with multilevel input 5. Regular reviews are built-in
Direct and indirect budget 2013-14
Tax meaning A tax (from the Latin taxo; "I estimate") is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law.
Objectives of Taxation Goals of taxation Foster economic and social goals of a government Goals include: Raising revenue Redistributing wealth Stabilizing prices Full employment Home ownership Charitable contributions
Classification of Taxes
Classification of Taxes (1) According to the incidence of tax (a) Direct Tax (b) Indirect Tax (2) According to the percentage of income being taxed (a) Progressive Tax (b) Proportional Tax ( c ) Regressive Tax
Direct Tax Tax on individuals directly Taxburden cannot be shifted to other people
Examples of Direct Tax Property Tax Profits Tax Salaries Tax Estate Duty
Indirect Tax Tax on goods and services Tax burden can be shifted to other people Indirect Tax Producers Consumers
Examples of Indirect Tax Betting Duty Rates Entertainment Tax Stamp Duties Motor Vehicles First Tax on Registration Tax Alcoholic Liquor
Personal Tax No changes in personal Income Tax slabs
Normal Rates of tax Where the total income does not Nil exceed Rs. 2,00,000/-. Where the total income exceeds Rs. 10 per cent of the amount by which 2,00,000 but does not exceed Rs. the total income exceeds Rs.2,00,000/- 5,00,000/- Where the total income exceeds Rs. Rs. 30,000/- plus 20 per cent of the 5,00,000/- but does not exceed Rs. amount by which the total income 10,00,000/-. exceeds Rs. 5,00,000/-. Where the total income exceeds Rs. Rs. 130,000/- plus 30 per cent of the 10,00,000/-. amount by which the total income exceeds Rs. 10,00,000/-.
Rates of tax for an individual, resident in India and of the age of sixty years or more but less than eighty years at any time during the financial year: Where the total income does not Nil exceed Rs. 2,50,000/-. Where the total income exceeds Rs. 10 per cent, of the amount by which 2,50,000 but does not exceed Rs. the total income exceeds Rs. 5,00,000/-. 2,50,000/- Where the total income exceeds Rs. Rs. 25,000/- plus 20 per cent of the 5,00,000/- but does not exceed Rs. amount by which the total income 10,00,000/-. exceeds Rs. 5,00,000/-. Where the total income exceeds Rs. Rs. 125,000/- plus 30 per cent of the 10,00,000/-. amount by which the total income exceeds Rs. 10,00,000/-.
In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year Where the total income does not exceed Nil Rs. 5,00,000/- Where the total income exceeds Rs. 20 per cent of the amount by which the 5,00,000/- but does not exceed Rs. total income exceeds Rs. 5,00,000/- 10,00,000/- Where the total income exceeds Rs. 1,00,000/- plus 30 per cent of the Rs.10,00,000/- amount by which the total income exceeds Rs.10,00,000/-
Other Major Direct taxes in budget 2013-14 Personal Tax No changes in personal Income Tax slabs Surcharge on super rich Surcharge of 10% for income of Rs 1 cr or more per annum for one year Surcharge to be applicable for individuals and corporate 1% TDS for property sale worth more than Rs 50 lakh; agri land exempt Tax credit of Rs 2000 on incomes between Rs2-5 lakh 5.5% tax to GDP ratio for direct tax Tax administration reform commission to be set up to strengthen the system
Our tax to GDP ratio is very low Should reclaim 11.9% Tax-GDP ratio in short-term There are 42,800 persons in the country who admitted to a taxable income exceeding Rs 1 cr per year Donations to National Children's Fund will be eligible for 100% tax deduction Long-term infra bonds also eligible for tax deduction; additional Rs 1 lakh deduction for home loans TDS on value of immovable property as transaction on immovable properties are usually undervalued
Extends tax cuts benefits to Rupee Infrastructure Funds Educational Cess to continue at 3 % Securitization Trust income to be exempt Tax on Royalty for services provided abroad increased by 10%
Corporate Tax Firms that invest Rs.100 cr or more in machinery can deduct an investment allowance. Surcharge increased to 10% on domestic companies. For foreign companies, surcharge is increased from 2 to 5%. Infrastructure tax-free bond of Rs.50,000 crore in 2013-14 Rs.5,000 crore to NABARD to finance construction for warehousing. TDS at 1% on value of transfer of immoveable properties over Rs.50 lakh
Indirect Taxes No change in peak rate for Customs Duty on non-agri products Leather and goods duty reduced to 5% Luxury cars import duty at 100% (75%- 100%) , Motor Cycle 800cc will go up to 60% to 75% Yachts duty at 25% No change in customs duty of 10% No change in excise duty or service tax of 12%
Precious, semi-precious duty reduced Luxury motor vehicles to be taxed more Baggage rules to permit bringing jewellery duty free limit raised to Rs 50000 for males and Rs 1 lakh for females Tax on SUVs increased from 27% to 30%; taxis exempt Excise duty on set top box increased 6% duty on mobiles costing more than Rs 2000 Excise on service tax on all air-conditioned restaurants
Handmade carpets exempt for excise duty Increase in excise duty on cigarettes by 18% Excise on readymade garments reduced Excise on Service Tax defaulters from 1-10-2007 can submit tax without being penalised or interest charged Advocates need for GST 4.5% tax to GDP ratio for indirect tax
IMPACTS No changes have been made to the existing tax slabs this year. Rs.2,000 Tax credit for people income upto Rs.5 lakh Pay more to eat Pay more to talk Import duty on precious stones down from 10% to 2%
Direct and indirect budget 2013-14

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Direct and indirect budget 2013-14

  • 2. What is a budget? A Plan A Limit A Schedule A Reality Check An Allocation
  • 3. Budget a definition A planned expression of money For a defined activity Shows; Income & Expenditure Total estimated costs Defined period of time
  • 4. More definitions Budget = Quantitative expression of a plan Forecasting Budgets involve Planning & Planning & Control Control & Evaluation
  • 5. Budgeting in Context Historic Plus Effects of Information Outside Environment Forecasting & Planning Evaluating Performance Current Operating Controlling Data operations
  • 6. A budget helps Want Need Budget can
  • 7. Types of budgeting There are three common budgeting methods: Top-down Budgeting Bottom-up Budgeting Iterative Budgeting
  • 8. Top Down Budgeting Top-Down Budgeting is the term given to a budgeting process based on estimating the cost of higher level tasks first and using these estimates to constrain the estimates for lower level tasks
  • 9. Bottom Up Budgeting Sometimes called Zero Based Budgeting Bottom-up budgeting begins with identifying all the constituent tasks that are involved in implementing a project and working out the resources and funding required by each
  • 10. Iterative Budgeting Iterative to repeat or do again A combination of top-down and bottom-up budget building Higher project level estimated (top down) Lower level costed (bottom up) The two costs negotiated and reconciled
  • 11. Budgetary Control The ability to control anticipated expenditures for your project using a project cost budget.
  • 12. Features of an effective budget 1. Accurate forecasting 2. Based on organisational goals 3. Information is timely and accurate 4. Formed with multilevel input 5. Regular reviews are built-in
  • 14. Tax meaning A tax (from the Latin taxo; "I estimate") is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law.
  • 15. Objectives of Taxation Goals of taxation Foster economic and social goals of a government Goals include: Raising revenue Redistributing wealth Stabilizing prices Full employment Home ownership Charitable contributions
  • 16. Classification of Taxes
  • 17. Classification of Taxes (1) According to the incidence of tax (a) Direct Tax (b) Indirect Tax (2) According to the percentage of income being taxed (a) Progressive Tax (b) Proportional Tax ( c ) Regressive Tax
  • 18. Direct Tax Tax on individuals directly Taxburden cannot be shifted to other people
  • 19. Examples of Direct Tax Property Tax Profits Tax Salaries Tax Estate Duty
  • 20. Indirect Tax Tax on goods and services Tax burden can be shifted to other people Indirect Tax Producers Consumers
  • 21. Examples of Indirect Tax Betting Duty Rates Entertainment Tax Stamp Duties Motor Vehicles First Tax on Registration Tax Alcoholic Liquor
  • 22. Personal Tax No changes in personal Income Tax slabs
  • 23. Normal Rates of tax Where the total income does not Nil exceed Rs. 2,00,000/-. Where the total income exceeds Rs. 10 per cent of the amount by which 2,00,000 but does not exceed Rs. the total income exceeds Rs.2,00,000/- 5,00,000/- Where the total income exceeds Rs. Rs. 30,000/- plus 20 per cent of the 5,00,000/- but does not exceed Rs. amount by which the total income 10,00,000/-. exceeds Rs. 5,00,000/-. Where the total income exceeds Rs. Rs. 130,000/- plus 30 per cent of the 10,00,000/-. amount by which the total income exceeds Rs. 10,00,000/-.
  • 24. Rates of tax for an individual, resident in India and of the age of sixty years or more but less than eighty years at any time during the financial year: Where the total income does not Nil exceed Rs. 2,50,000/-. Where the total income exceeds Rs. 10 per cent, of the amount by which 2,50,000 but does not exceed Rs. the total income exceeds Rs. 5,00,000/-. 2,50,000/- Where the total income exceeds Rs. Rs. 25,000/- plus 20 per cent of the 5,00,000/- but does not exceed Rs. amount by which the total income 10,00,000/-. exceeds Rs. 5,00,000/-. Where the total income exceeds Rs. Rs. 125,000/- plus 30 per cent of the 10,00,000/-. amount by which the total income exceeds Rs. 10,00,000/-.
  • 25. In case of every individual being a resident in India, who is of the age of eighty years or more at any time during the financial year Where the total income does not exceed Nil Rs. 5,00,000/- Where the total income exceeds Rs. 20 per cent of the amount by which the 5,00,000/- but does not exceed Rs. total income exceeds Rs. 5,00,000/- 10,00,000/- Where the total income exceeds Rs. 1,00,000/- plus 30 per cent of the Rs.10,00,000/- amount by which the total income exceeds Rs.10,00,000/-
  • 26. Other Major Direct taxes in budget 2013-14 Personal Tax No changes in personal Income Tax slabs Surcharge on super rich Surcharge of 10% for income of Rs 1 cr or more per annum for one year Surcharge to be applicable for individuals and corporate 1% TDS for property sale worth more than Rs 50 lakh; agri land exempt Tax credit of Rs 2000 on incomes between Rs2-5 lakh 5.5% tax to GDP ratio for direct tax Tax administration reform commission to be set up to strengthen the system
  • 27. Our tax to GDP ratio is very low Should reclaim 11.9% Tax-GDP ratio in short-term There are 42,800 persons in the country who admitted to a taxable income exceeding Rs 1 cr per year Donations to National Children's Fund will be eligible for 100% tax deduction Long-term infra bonds also eligible for tax deduction; additional Rs 1 lakh deduction for home loans TDS on value of immovable property as transaction on immovable properties are usually undervalued
  • 28. Extends tax cuts benefits to Rupee Infrastructure Funds Educational Cess to continue at 3 % Securitization Trust income to be exempt Tax on Royalty for services provided abroad increased by 10%
  • 29. Corporate Tax Firms that invest Rs.100 cr or more in machinery can deduct an investment allowance. Surcharge increased to 10% on domestic companies. For foreign companies, surcharge is increased from 2 to 5%. Infrastructure tax-free bond of Rs.50,000 crore in 2013-14 Rs.5,000 crore to NABARD to finance construction for warehousing. TDS at 1% on value of transfer of immoveable properties over Rs.50 lakh
  • 30. Indirect Taxes No change in peak rate for Customs Duty on non-agri products Leather and goods duty reduced to 5% Luxury cars import duty at 100% (75%- 100%) , Motor Cycle 800cc will go up to 60% to 75% Yachts duty at 25% No change in customs duty of 10% No change in excise duty or service tax of 12%
  • 31. Precious, semi-precious duty reduced Luxury motor vehicles to be taxed more Baggage rules to permit bringing jewellery duty free limit raised to Rs 50000 for males and Rs 1 lakh for females Tax on SUVs increased from 27% to 30%; taxis exempt Excise duty on set top box increased 6% duty on mobiles costing more than Rs 2000 Excise on service tax on all air-conditioned restaurants
  • 32. Handmade carpets exempt for excise duty Increase in excise duty on cigarettes by 18% Excise on readymade garments reduced Excise on Service Tax defaulters from 1-10-2007 can submit tax without being penalised or interest charged Advocates need for GST 4.5% tax to GDP ratio for indirect tax
  • 33. IMPACTS No changes have been made to the existing tax slabs this year. Rs.2,000 Tax credit for people income upto Rs.5 lakh Pay more to eat Pay more to talk Import duty on precious stones down from 10% to 2%