1. 28th Feb 2013

2. What is a budget?
• A Plan
• A Limit
• A Schedule
• A Reality Check
• An Allocation

3. Budget – a definition
“A planned expression of money”
For a defined activity Shows;
• Income & Expenditure
• Total estimated costs
• Defined period of time

4. More definitions
Budget = Quantitative expression of a plan
Forecasting
Budgets involve – Planning &
Planning
&
Control
Control &
Evaluation

5. Budgeting in Context
Historic
Plus Effects of
Information
Outside
Environment
Forecasting &
Planning Evaluating
Performance
Current
Operating
Controlling Data
operations

6. A budget helps
Want
Need
Budget
can

7. Types of budgeting
There are three common budgeting methods:
• Top-down Budgeting
• Bottom-up Budgeting
• Iterative Budgeting

8. Top Down Budgeting
Top-Down Budgeting is the term given to a
budgeting process based on estimating the
cost of higher level tasks first and using these
estimates to constrain the estimates for lower
level tasks

9. Bottom Up Budgeting
Sometimes called Zero Based Budgeting
• Bottom-up budgeting begins with identifying all
the constituent tasks that are involved in
implementing a project and working out the
resources and funding required by each

10. Iterative Budgeting
Iterative – to repeat or do again
A combination of top-down and bottom-up
budget building
Higher project level estimated (top down)
Lower level costed (bottom up)
The two costs negotiated and reconciled

11. Budgetary Control
The ability to control anticipated
expenditures for your project using a
project cost budget.

12. Features of an effective budget
1. Accurate forecasting
2. Based on organisational goals
3. Information is timely and accurate
4. Formed with multilevel input
5. Regular reviews are built-in

14. Tax meaning
A tax (from the
Latin taxo; "I estimate") is a
financial charge or other
levy imposed upon a
taxpayer (an individual
or legal entity) by a state or
the functional equivalent of
a state such that failure to
pay is punishable by law.

15. Objectives of Taxation
• Goals of taxation – Foster economic and social
goals of a government
• Goals include:
– Raising revenue
– Redistributing wealth
– Stabilizing prices
– Full employment
– Home ownership
– Charitable contributions

16. Classification
of
Taxes

17. Classification of Taxes
• (1) According to the
• incidence of tax
• (a) Direct Tax
• (b) Indirect Tax
• (2) According to the
• percentage of income
• being taxed
• (a) Progressive Tax
• (b) Proportional Tax
• ( c ) Regressive Tax

18. Direct Tax
• Tax on individuals
directly
Taxburden cannot
be shifted to other
people

19. Examples of Direct Tax
Property
Tax
Profits Tax
Salaries Tax
Estate
Duty

20. Indirect Tax
• Tax on goods
and services
• Tax burden can
be shifted to
other people Indirect
Tax
Producers
Consumers

21. Examples of Indirect Tax
Betting Duty
Rates
Entertainment Tax
Stamp Duties
Motor Vehicles First Tax on
Registration Tax Alcoholic
Liquor

22. Personal Tax
“No changes in
personal Income
Tax slabs”

23. Normal Rates of tax
Where the total income does not Nil
exceed Rs. 2,00,000/-.
Where the total income exceeds Rs. 10 per cent of the amount by which
2,00,000 but does not exceed Rs. the total income exceeds Rs.2,00,000/-
5,00,000/-
Where the total income exceeds Rs. Rs. 30,000/- plus 20 per cent of the
5,00,000/- but does not exceed Rs. amount by which the total income
10,00,000/-. exceeds Rs. 5,00,000/-.
Where the total income exceeds Rs. Rs. 130,000/- plus 30 per cent of the
10,00,000/-. amount by which the total income
exceeds Rs. 10,00,000/-.

24. Rates of tax for an individual, resident in India and of the age of
sixty years or more but less than eighty years at any time
during the financial year:
Where the total income does not Nil
exceed Rs. 2,50,000/-.
Where the total income exceeds Rs. 10 per cent, of the amount by which
2,50,000 but does not exceed Rs. the total income exceeds Rs.
5,00,000/-. 2,50,000/-
Where the total income exceeds Rs. Rs. 25,000/- plus 20 per cent of the
5,00,000/- but does not exceed Rs. amount by which the total income
10,00,000/-. exceeds Rs. 5,00,000/-.
Where the total income exceeds Rs. Rs. 125,000/- plus 30 per cent of the
10,00,000/-. amount by which the total income
exceeds Rs. 10,00,000/-.

25. In case of every individual being a resident in India, who is of
the age of eighty years or more at any time during the
financial year
Where the total income does not exceed Nil
Rs. 5,00,000/-
Where the total income exceeds Rs. 20 per cent of the amount by which the
5,00,000/- but does not exceed Rs. total income exceeds Rs. 5,00,000/-
10,00,000/-
Where the total income exceeds Rs. 1,00,000/- plus 30 per cent of the
Rs.10,00,000/- amount by which the total income
exceeds Rs.10,00,000/-

26. Other Major Direct taxes in budget
2013-14
Personal Tax
• No changes in personal Income Tax slabs
• Surcharge on super rich
• Surcharge of 10% for income of Rs 1 cr or more per annum for one year
• Surcharge to be applicable for individuals and corporate
• 1% TDS for property sale worth more than Rs 50 lakh; agri land exempt
• Tax credit of Rs 2000 on incomes between Rs2-5 lakh
• 5.5% tax to GDP ratio for direct tax
• Tax administration reform commission to be set up to strengthen the system

27. • Our tax to GDP ratio is very low
• Should reclaim 11.9% Tax-GDP ratio in short-term
• There are 42,800 persons in the country who admitted to a taxable
income exceeding Rs 1 cr per year
• Donations to National Children's Fund will be eligible for 100% tax
deduction
• Long-term infra bonds also eligible for tax deduction; additional
Rs 1 lakh deduction for home loans
• TDS on value of immovable property as transaction on immovable
properties are usually undervalued

28. • Extends tax cuts benefits to Rupee Infrastructure
Funds
• Educational Cess to continue at 3 %
• Securitization Trust income to be exempt
• Tax on Royalty for services provided abroad
increased by 10%

29. Corporate Tax
• Firms that invest Rs.100 cr or more in machinery can
deduct an investment allowance.
• Surcharge increased to 10% on domestic companies.
• For foreign companies, surcharge is increased from 2 to 5%.
• Infrastructure tax-free bond of Rs.50,000 crore in 2013-14
• Rs.5,000 crore to NABARD to finance construction for
warehousing.
• TDS at 1% on value of transfer of immoveable properties
over Rs.50 lakh

30. Indirect Taxes
• No change in peak rate for Customs Duty on non-agri products
•
• Leather and goods duty reduced to 5%
•
• Luxury cars import duty at 100% (75%- 100%) , Motor Cycle 800cc
will go up to 60% to 75%
•
• Yachts duty at 25%
•
• No change in customs duty of 10%
•
• No change in excise duty or service tax of 12%

31. • Precious, semi-precious duty reduced
• Luxury motor vehicles to be taxed more
• Baggage rules to permit bringing jewellery duty free limit raised to
Rs 50000 for males and Rs 1 lakh for females
• Tax on SUVs increased from 27% to 30%; taxis exempt
• Excise duty on set top box increased
• 6% duty on mobiles costing more than Rs 2000
• Excise on service tax on all air-conditioned restaurants

32. • Handmade carpets exempt for excise duty
• Increase in excise duty on cigarettes by 18%
• Excise on readymade garments reduced
• Excise on Service Tax defaulters from 1-10-2007 can
submit tax without being penalised or interest charged
• Advocates need for GST
• 4.5% tax to GDP ratio for indirect tax

33. IMPACTS
No changes have been made to the existing tax
slabs this year.
Rs.2,000 Tax credit for people income upto Rs.5
lakh
Pay more to eat
Pay more to talk
Import duty on precious stones down from 10%
to 2%