Agricultural land redefined

KPMG | Updated on March 11, 2013

MEDAK: A farmer seeding in his agrland for after the rain in sangareddy mandal medak of Andhra Pradesh.MOHD ARIF..   -  THE HINDU

Income tax proposals of general interest in Finance Bill 2013 include

In order to widen the taxpayer base, it has been proposed to introduce TDS (tax deducted at source) of 1 per cent on transfer of land or building for a consideration exceeding Rs 50 lakh, with effect from June 1, 2013. All property buyers, including individuals, will be liable to deduct tax. This may apply to purchase from builders too.

Levy of 10 per cent surcharge on all non-corporate persons with income exceeding Rs 1 crore and double surcharge on companies with income exceeding Rs 10 crore. These provisions apply for one year only, which is a great relief.

Subject to specified conditions, manufacturing companies investing Rs 100 crore are allowed investment allowance of 15 per cent above allowable depreciation.

Definition of agricultural land has been amended, widening the scope. This may now make transfer of certain kinds of land liable to taxes. There is a similar amendment for wealth tax also.

Not pandering to populist agenda

There is no doubt that the economy is going through one of the most challenging periods in a decade. In the short term, there is need to spur growth upward of 6 per cent, tame inflation, deal with the current account and fiscal deficit, and maintain credit ratings. Finance Minister P. Chidambaram has attempted to present an inclusive as well as prudent budget. He has stood by his word on a stable tax regime as far as taxation of individuals is concerned, barring the small increase in tax for the super rich and inflation-adjusted increase in basic slab benefitting about 18 million taxpayers. In his speech, he did not shy away from recognising the challenges faced by the economy and spelt out the steps to be taken in the days and months to come.

Yet to scale GST hurdle

The basic rates of excise duty, customs and service tax have remained unchanged except for

Duty on SUVs increased from 27 per cent to 30 per cent;

Increase of 5 per cent in excise duty on mobile phones priced above Rs 2,000;

Higher excise and customs duty on luxury products such as motorcars, bikes, yachts;

Amnesty Scheme for service tax defaulters.

The Finance Minister announced that consensus is being built with State finance ministers on Goods and Services Tax. Therefore, GST now appears to be on the horizon.

Published on March 11, 2013

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