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siness / Cover Stories / Opinion MAGAZINE | MAR 11, 2013

STMENT ANALYSI S

he Ol Sop N Sinkbudget permits a voyeuristic pleasure in watching the rich squirm beneath a 10 per cent

charge.

TAM CHIKERMANE

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at can a troubled FM in troubling times deliver? Very little. But within the constraints, P.

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dambaram has been able to shoot for what he could. Hes been brutally honest: Even a

derate increase in the level of threshold exemption will mean that hundreds of thousands of

payers will go out of the tax net and the tax base will be severely eroded. No revision of tax

bs, no new exemptions. And barring a mere feelgood credit for 18 million taxpayersup to

2,000 for incomes of Rs 5 lakhno relief from rising prices, slow growth, high interest

s.

ond the inflation-infested real estate markets of the metros, though, there is respite. If

re a first-time home buyer and borrow Rs 25 lakh, you will get an additional deduction of

1 lakh above the exis ting deduction of Rs 1.5 lakh. But, a house with a carpet area of over

00 sq ft or priced over Rs 1 crore will cost morethats nearly every apartment in the met-

re were no additions to the 80C list of exemptions. Thats goodthe simpler the t ax code,

easier it is for honest taxpayers to follow. That the know your customer (KYC) process in

ks will suffice for insurance policies is a good step. Why it was not extended to all financial

ducts escapes logic. Post-debate, I hope investors can look at a single KYC to mutual

ds, stocks, futures and commodities. This would enable a smoother transition to financial

ducts, instead of the default option of real estate and gold.

bin Hood budgets have been presented over and again. Budget 2013-14 returns to that idea

second dash to tax the rich. Of course, we hate the richtill we get there, that is. So,

s relish the voyeuristic pleasures to be had in watching them squirm. A person with a

able income of Rs 1.2 crore will have to pay Rs 3,53,290 more in taxes due to a 10 per cent

charge. That translates into a princely sum of less than Rs 30,000 per monther, what are

y whining about?

es what. The real pinch to the 42,800-strong army of people making more than Rs 1 crore

annum will come from the spending sidefrom imported cars and yachts (customs duty

ed to 100 per cent from 75 per cent) to SUVs (excise duty up by 3 per cent) and cigars

cise duties raised by 18 per cent), the (not so) merry man in whites has increased taxes on

hese luxury productsand given us enough to feel good about. But if I were to pick the one

g I like about Chidambarams pre-election budget, it is this: a one per cent tax deducted at

rce (TDS) for all property transactions (minus the holy cow, agricultural land) worth Rs 50

h or more. The idea, it appears, is to improve the reporting of such transact ions for paying

tal gains. And even though the problem of undervaluation remains unaddressed, unclear

open to debate, this is a good first step towards hitting unaccounted-for transactions.

author is a journalist and policy analyst; gchikermane AT gmail.com

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D IN:

HORS: GAUTA M CHIKERMANE

S: BUDGET 2013 | BUDGETS | RICH | TAXES-DIRECT & INCOME TAX | REALTY

TION: BUSINESS

SECTION: COVER STORIES | OPINION

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ALSO IN THIS STORYGET 2013-14

e What-If Man Of Tomorrow

one dare say it, but Indian politics has a hidden vacancy. Can P. Chidambaram fill it?A NAYAR

GET 2013-14

Have A Chance, And Have Not

hidambaram to keep Rahuls seat warm? A close look...realpolitik says nay.A NAQVI

JUMP CUT

The Hopefuls GambitWhat P. chidambaram needs to watch is the gap in his budgets between projections

and ground realities.NARENDAR PANI

JUMP CUT

The Leaves Have Turned YellowRather than making people self-reliant, the government has reduced them to a line of

begging bowls.P.V. RAJAGOPAL

SONAL FINANCE: OUTLOOK MONEY

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MARKETS

The Baritone EbbsDespite the effect his speech had on equity markets, his budget tackles the issue of

a slowing economy.MOHIT SATYANAND

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1/D-91

MAR 02, 2013

03:08 PM

'Tax the males to appease the feminists"

This seems to be the established financial mantra of our nation that

is doomed.

MALE UNBLOCKED

CHENNAI, INDIA

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