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Budget 2013 and TDS Provisions

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Tax Rate and Slabs

There is no change in tax rate or slabs. However surcharge has been proposed as follows


Existing Surcharge

Proposed Surcharge

Domestic Company having income exceeding 1 crore but not exceeding 10 crore



Domestic Company having income  exceeding 10 crore



Non-Domestic Company having income exceeding 1 crore but not exceeding 10 crore



Non-Domestic Company having income  exceeding 10 crore



Others having income exceeding Rs. 1 Crore



TDS Rates

There is no change in rates of TDS

Surcharge and cess is to be considered while deducting tax at source in respect of

  • payment to non-residents and non-domestic companies
  • payment of salaries

Raising of limit of eligible premium on insurance policies- Sec, 80C

Currently deduction under section 80C in respect of premium paid on life insurance policy is allowable only if such premium does not exceed 10% of sum assured.This limit of 10% is increased to 15% in respect of life insurance policy of a person

  • with disability as referred in section 80U or
  • with disease as specified in section 80DDB
  • Such policy is issued on or after 01-04-2013

Contribution to health schemes – Sec. 80D

Central Government can specify health schemes , contribution to which will be eligible for deduction under section 80D

Rebate of Rs. 2000 on individuals having total income upto Rs. 5 Lac- Sec 87A

An individual having taxable income of upto Rs. 5 Lac , can claim rebate under section 87A of actual amount tax subject to maximum of Rs. 2000

Additional deduction for interest on new home loan- Sec 80EE

A new deduction under section 80EE is proposed as follows:

  •  An individual buying residential house for the first time and taking loan from any financial institution can claim this deduction
  • Conditions to be fulfilled :
  1. The loan must be sanctioned between 1st April 2013 and 31st March 2014.
  2. The loan amount should not exceed Rs. 25 Lacs
  3. The value of residential house does not exceed 40 Lacs
  4. Individual does not own any residential house on the date of sanction of loan
  • Amount of deduction is limited to Rs. 1 Lac and is to be allowed only during Assessment year 2014-15. However, if the interest amount is less than 1 lac during AY 2014-15, the balance amount can be claimed during Assessment Year 2015-16
  • This deduction is in addition to deduction of Rs. 1.50 Lacs available in respect of interest payment on home loans.

Expansion in scope for Rajeev Gandhi Equity Saving  Scheme- Sec. 80CCG

The scope of scheme is proposed to be expanded from Assessment Year 2014-15  to

  •  include investment in equity oriented mutual funds
  •  extend deduction to three consecutive assessment years as against one assessment year at present
  •  raise threshold from 10 Lac to 12 Lac as gross total income to be eligible to claim this deduction

Donation to National Children’s Fund- Sec 80G

Donations made to National Children’s Fund will be eligible for 100% deduction. This is being increased from 50% applicable as present

TDS @ 1% on transfer of immovable property- Sec. 194-IA

  • A new section 194-IA is proposed to provide that
    •  every transferee,
    •  at the time of making payment or crediting of any sum as consideration which is Rs. 50 Lacs and above
    •  for transfer of immovable property (other than agricultural land)
    •  to a resident transferor,
    •  shall deduct tax @ 1% of such sum
  • This provision is effective 1st June 2013
  • This is applicable even to Individuals/ HUFs not covered under tax audit u/s 44AB
  • The purchaser will have to apply for TAN, deposit tax and file TDS statements


  1. Mahesh Kumar Ramaswamy/Internal Audit/Corp/NCML says:

    Some clarification is required on the following which is not clear to me in your post:

    1.Raising of limit of eligible premium on insurance policies-Sec,80C-Whether this is applicable only for 80U & 80DDB or for any normal individual taking LI policies.

    2.Additional deduction for interest on new home loan-Sec 80EE- Whether this additional deduction of Rs.100000 is one time deduction or additional to 1.50 lacs existing which we can claim every A.Y. from PY 13-14.



    • Rames says:

      1. It is applicable only a person with disability as referred in section 80U or 80DDB – not to other persons
      2. This is one time deduction only. e.g. suppose in case of Mr. A(provided all conditions are satisfied), interest amount is Rs. 275000 in PY13-14 and Rs. 235000 in PY 14-15, he will get deduction of Rs. 250000 in PY 13-14 and Rs. 150000 in PY 14-15.

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