Budget Analysis: Pvt cos in liquidation as directors liability increased

Budget 2013 interpretations

14:20 PM: Private companies in liquidation as directors liability increased.

Board will be framing rules for- e-filing of wealth tax returns.
Mutual Funds covered for deductions u/s 80CCG. Amendment on TRC (Tax Residence Certificate) not in line with Shome Community recommendation.
GAAR-Presumes tax benefit unless proved contrary. It will also override DTAA Contrary to Shome Community. There was no threshhold limit proposed.

14:10 PM: Excise duty on readymade garments was exempted. This was positive news for textile sector.

On Ayurvdic medicaments there will be MRP based excise duty on them. Also, there will be excise duty on mobile phones of RSP Rs 2000.
FM said that TRC (Tax Residence Certificate) is necessary but not sufficient for DTAA (Double Taxation Avoidance Agreement) benefits.

14:00 PM: Net increase in MAT rate by 0.95 percent for Rs 10 crore book profits.
There will be Inc scrutiny for foreign investor. This will include the Mauritius route.

13:48 PM: Happy news for shipping was that excise duty was exempted on ships and vessels. Whereas excise duty on marble slabs was increased which was sad for real estate.
There won't be any extension of 80IA deduction for Hospitals and Hotels.
No Cascading effect of DDT (dividend distribution tax) on dividend recorod from foreign companies. 13:35 PM: There was no concrete announcement on GST timelines. Plus, there was no deduction for corporate on cash cont to political parties. No amendments proposed on TP provisions and no relief on retro amendments was introduced in Budget 2012. 13:25 PM: FM proposed a reduced custom duty on dehulled oat grains. This will be a good news for FMCG. Also there is a custom duty on steam coal & bituminous. The coal is now made uniform. On the other hand customs duty reduced and P&M for leather & footwear industry.
FM also exempted customs on parts of electronic cars till 2015. 13:10 PM: 15 percent tax on dividends from overseas company is now extended by a year.
The buyback by an unlisted entity will now be more expensive for shareholder.
Foreign technology will now cost more with rise in TDS rates. There will be one percent revival in TDS on real estate.
ETR (Effective Tax rate) for domestic companies will be 33.99 percent. This is applicable to once with the income over Rs 10 crore. There will also be 21 percent effective MAT rate for domestic companies.
Large housing was saddled with additional taxes. On the other hand there was no inheritance tax or estate duties introduced.

12:55 PM: The rate of abatement on high cost was reduced. This was a negative news for DLF.
The FM talked about the personal baggage allowances increased to 75000-100000.

FM also spoke about the o1ne time amnesty scheme for Service tax defaulters. Now there will be compulsory e-filing of ROI. This is for more assesses.
An increase in effective tax rate by 2.3 percent will be there for FCos.

12:45 PM: Excise duty on cigarettes increased to 18 percent this is sad news for ITC.  He also increased excise duty on SUV's, which will have negative effect on Tata Motors and M&M.
Any individual with the income above Rs 1 crore to pay an additional tax of Rs 291490.
Distributable income has been reduced by 1 percent on account of increase in (Dividend Distribution Tax) DDT rate.
The FM proposed an increase in customs duty on the set top boxes. That will be from 5 percent to 10 percent. The effect is defiantly going to be negative on DTH players.

12:40 PM: 80 IA benefit for power plants extended. This is positive for power generators. This shows that power sector continue to benefit from deduction u/s 80IA.
The Corp tax rate was changed from 32.44 percent to 33.99 percent.
The STT is reduced and a good news for IIFL, Motilal Oswal and Religare. Where as the CTT levy on non agriculture contracts. This goes in the negative basket for MCX and FT.
GAAR has been deferred to 1 April 2016. It could be invoked with the purpose of tax benefit.
Transfer pricing safe harbour will be announced by 31 March 2013.

12:34 PM: FM announces a Tax credit of Rs 2000 for those, whose total income is Rs 5 lakh.

He also extends the power sector's tax holiday to March 31, 2015. 

In case of foreign companies an effective tax rate of 43.26 percent will be there. 12:24 PM: FM talks about higher allocation to defence. This is positive for BEL, BEML and M&M
He proposes a 3000 kms of road awards. This is a good news for L&T, IRB, and IVRCL.
There will be an investment benefit for high value projects. This seems to be positive on capital goods.
SIDBI's (Small Industries Development Bank of India) re-financing facility will benefit the micro, small and medium enterprises (MSMEs).
FM also proposes 3 percent increase in surcharge for foreign companies.

12:15 PM: Now the FIIs can participate in currency derivatives. This will be positive for MCX
FM also proposed a higher allocation for wind and Energy which is Positive for Suzlon.
Negative news for semiconductor industry. As he speaks about  zero customs duty on P&M. An additional investment allowance on P&M. This will be a negative 4 to 5 percent with effective tax saving.
The Bk Correspondents can now sell micro financial Products. This seems positive for SKS Microfinance.

12:02 PM: FM focuses on encouragement on PPP projects for Coal. Coal India will increase by 3 percent.
He proposes some foreign trade policy changes to benefit exporters. The additional investment allowance of 4-5 percent will be effective on additional tax saving. For increase effect in Capex, he announces investment allowance in P&M.

11:50 AM: Now the RGESS Investors can invest in mutual funds's. This is positive for asset Management companies. He says that every Rs 100 crore investment will attract. This will accelerate the depreciation. There will be changes in E&P Policy. This will be positive for upstream sector. 

FM announced housing loan interest to save Rs 30900 for tax payer in 30 percent bracket. This additional interest loan deduction will be positive for real state.

11:40 AM: FM proposes investment allowance of 15 percent for Capex.  This will again be positive for Infra.
Coming to IRB Infrastructure and to get positive on that. He announces regulatory authority for road. He also gives a customs duty exemption for semiconductor projects.
FM announces invest allowance of 15 percent for investment in plant and machinery. That will be between April 13 to march 13. He introduces additional housing loan, with a deduction for new loans.

11:36 AM: More positive news for the infra sector. He announces Rs 50,000 crore limits for tax free infra bonds.
FM continues farm loan interest subvention. This will have a negative effect on Bank Nifty. He creates investor friendly environment with tax regime.
He looks forward to encourage IDFs. This will have a positive effect on the Infrastructure Sector.

11:25 AM: A 17 percent hike in allocation for education. A positive impact for Educomp and Everonn
A 30 percent increase in plan expense. This will be positive for infrastructure. He adds a higher allocation for water, treatment. Positive effect on Triveni Engineering & Industries.

JNNURM alloacted Rs 14873 crores. It will have a positive effect on Ashok Leyland, Tamo. 10:00 AM: FM arrives at cabinet for Budget meet.