As per the Budget 2013-14 a corporate organization should concern on the following points in Direct Tax –

Hiked in Surcharge rate

(A) In case Domestic Company: Rate of surcharge has been hiked from 5% to 10%, if the taxable income exceeds Rs. 10 crore.

(B) In case Foreign based Company: Revised Surcharged rate would be 5% applicable instead of 2%, if the taxable income exceeds Rs. 10 crore.

Concept of Additional Surcharge

This additional rate has to be in force for only 1 year.

Hiked in Surcharge rate on Dividend Distribution Tax

Current surcharge rate on DDT or Tax on Distributed Income would enhance from 5% to 10%.

Increase in Premium Rate of Life Insurance Policies on the ground of suffering from disability & certain ailments

By virtue of Budget 2013-14, premium rate has been extended from 10% to 15% of the sum assured by relaxing eligibility conditions of life insurance policies for persons suffering from disability and certain ailments.

Area covered u/s 80D with new extension (Medical insurance premium)

Contributions made to schemes of Central and State Governments similar to Central Government Health Scheme (CGHS) is also eligible for deduction u/s 80D from now, but the limitation would be the same as earlier.

Amendment u/s 80G

Donations made to National Children Fund eligible for 100% deduction. Percentage of deduction has been raised from the last year, deduction limitation was 50%.

Relaxation in Investment Allowance to Manufacturing Concern

Investment made more than Rs. 100 crore in plant & machinery during the period 1.4.2013 to 31.3.2015 to any manufacturing companies would get Investment allowance @ rate of 15%.

Tax rate on dividend received by an Indian company from Foreign Company

Concessional rate tax would be 15% on dividend received.

Extension in timing benefit u/s 80-IA

Projects in the power sector to avail benefit under Section 80-IA extended from 31.3.2013 to 31.3.2014 from their “Eligible date”

Following Exemptions under Income Tax have been depicted in this budget

• Securitization Trust to be exempted from Income Tax;
• Investor Protection Fund of depositories.
• Transaction Tax on Agricultural commodities.

Insertion of New Section 194-IA under Tax Deducted at Source

Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor any sum by way of consideration for transfer of any Immovable property (other than agricultural land), shall, at the time of credit of such sum to the account of the transferor or at the time of payment of such sum in cash or by issue of a cheque or

draft or by any other mode, whichever is earlier, deduct an amount equal to 1% of such sum as income-tax thereon. Agricultural land has to be exempted.

Amendment in Tax Deducted at Source u/s 194J in respect of royalty and fees for technical services

According to new amendment in budget 2013-14, rate of tax has raised from 10 % to 25% for any payment made by way of royalty and fees for technical services to non-residents.

Cuts in Security Transaction Tax rate

Reductions made in rates of Securities Transaction Tax in respect of on equities and mutual fund units. STT rates are dropped from 0.17% to 0.1%.

Rate of tax on distributed profit by unlisted companies to shareholders via buyback scheme being fixed

Rate of tax 20% on profits distributed by unlisted companies to shareholders through buyback of shares has been fixed.

General Anti Avoidance modified w.e.f 2016-17 onwards

Modified provisions of GAAR will come into effect from 1.4.2016.