The Union Budget 2013-14 highlights (important parts for bank interviews)

Union Finance Minister Mr. Palaniappan Chidambaram presented the union budget 2013-14 on Feb 28, 2013. The key information and sets of data are as follows:

• Aim: To achieve higher growth rate and inclusive, sustainable development

• The global economic growth has been 3.2% in 2012.

• Fiscal deficit, current account deficit,inflation are the three main concerns.

Fiscal  deficit:

• Dr. Vijay Kelkar Committee recommendations: fiscal consolidation-

             -----  targeted fiscal deficit 5.3% GDP in 2012-13

             -----  targeted fiscal deficit 4.8% GDP in 2013-14

             -----  targeted fiscal deficit 3.0% GDP in 2016-17

• Fiscal deficit for the current year contained at 5.2% of GDP.

• Revenue deficit for the current year : 3.9% of GDP.

• Targeted revenue deficit for 2013-14: 3.3% of GDP.

• Targeted revenue deficit for 2016-17: 1.5% of GDP.

Current Account Deficit (CAD):  FII(Foreign Institutional Investment), FDI(Foreign Direct Investment), ECB (External Commercial Borrowing) are 3 main sources of CAD financing.

Direct Tax: No revision in slabs and rates for income tax.

Income tax slab for general and female tax payers:

• Yearly income: 0-2 Lakh -                       0%

• Yearly income: 2-5 Lakh -                      10%

• Yearly income: 5-10 Lakh -                    20%

• Yearly income: above 10 Lakh-              30% 

Income tax slab for senior citizens (60-80 years of age):

• Yearly income: 0- 2.5 Lakh -                 0%

• Yearly income: 2.5- 5 Lakh -                 10%

• Yearly income: 5- 10 Lakh -                  20%

• Yearly income: above 10 Lakh-             30% 

Income tax slab for very senior citizens (80 and above years of age):

• Yearly income: 0-5 Lakh -                       0%

• Yearly income: 5-10 Lakh -                    20%

• Yearly income: above 10 Lakh-              30% 

1.     A tax credit of INR 2000 to every person of annual income of INR 5 lakh

2.     To increase revenue earning, surcharge of 10% on taxable annual income exceeding INR 1 crore.

3.     Education cess : 3%

4.     Modified GAAR will come into effect from 1st April, 2016.

Indirect Tax:

• excise duty: 12%

• service tax: 12%

• customs duty for non-agricultural product: 10%

Other Highlights:

1.     Capital infusion of INR 14000 crore in public sector banks.

2.     First home loan up to INR 25 lakh from bank or a housing finance corporation entitled to additional deduction of interest up to INR 1 lakh.

3.     Direct Benefit Transfer Scheme.

4.     INR 1000 crore 'Nirbhaya Fund' for women's empowerment and safety.

5.     Proposal to setup first women's bank.

6.     Rajiv Gandhi Equity Savings Scheme to be liberalized for promoting savings in household sector.