Budget Reactions: Budget focus on realty, investment & tax positive: KPMG

Parizad Sirwalla
KPMG India

• Budget 2013 has introduced tax measures to further the UPA government’s objective of boosting the housing sector and encouraging investment in capital markets. Additional interest deduction of Rs 100,000 p.a (tax savings from Rs 10,300 p.a. to Rs 30,900 p.a. depending on current slab rate) for housing loan below Rs  25 lakh for 1st home in FY 13-14.
• The Rajiv Gandhi Equity Savings Scheme liberalized further is a step in the right direction for first time investors. They can invest in MF and listed shares- in 3 successive years instead of limiting the deduction to first year only. Also the enhancement of Income limit for availing deduction increased from 10 lakhs to 12 lakhs. This would provide a better impetus to the flow of savings into the  capital markets.
• Super rich tax in some form of 10 per cent surcharge introduced on income above Rs 1 crore for one year only. In the same breath it appears that a relief of tax of Rs 2,060 for taxpayers below 5 lacs of income where vast majority of the taxpayers are based. The overall slabs and tax rates remain same in view of the objective of widening tax base and increasing tax compliance.