Funding commitment: government may provide additional funds for industrial corridor projects enabling new smart cities and corridors.
The budget announces central support and a public funding commitment for accelerated implementation of industrial corridors: seven new cities on the Delhi-Mumbai Industrial Corridor with two smart cities (Dholera and Shendra-Bidkin) to start in 2013-14; DIPP and JICA are preparing a Chennai-Bengaluru Industrial Corridor with Tamil Nadu, Andhra Pradesh and Karnataka; preparatory work has also started on the Bengaluru-Mumbai Industrial Corridor.

Incentivising household savings: expanded equity scheme access, extended investor eligibility and extra home-loan interest deduction measures.
The measure liberalises the Equity Savings Scheme to allow first-time investors to invest in mutual funds and listed shares over three successive years and raises the income eligibility threshold; it also introduces an additional tax deduction for interest on qualifying first-home loans for a limited period and proposes inflation-protected instruments to preserve household savings, with details to be announced.

Foreign portfolio investor registration simplified with uniform KYC, expanded derivatives participation and collateralised margining.
Registration and KYC for non-resident portfolio investors are to be unified under depository participants and SEBI with converged norms; investor classification by stake is clarified to distinguish portfolio investment from direct investment. Portfolio investors are permitted to access exchange-traded currency derivatives within their domestic exposure and may use investments in corporate bonds and government securities as collateral to meet margin requirements. SEBI will also set recognition criteria for angel investor pools as Category I venture funds, and exchanges may create debt segments with broadened eligible investments for pension and provident funds.

Final withholding tax on buy back proceeds imposed; increased withholding on royalties and technical fees for nonresidents, subject to DTAAs.
Proposal to impose a final withholding tax on distributions via buy backs by unlisted companies to curb tax avoidance, and to increase withholding on royalties and fees for technical services paid to nonresidents while deferring to rates in applicable double tax avoidance agreements to correct domestic treaty rate anomalies.

Insurance penetration measures expand distribution channels and social security coverage to reach underserved populations.
Measures to increase insurance penetration include allowing insurers to open branches in tier II and below without prior regulator approval; permitting banks to act as insurance brokers with bank KYC accepted for policy purchases; authorising banking correspondents to sell micro insurance; and requiring LIC and at least one public general insurer to maintain offices in towns of 10,000+ population. Complementary proposals expand the Rashtriya Swasthya Bima Yojana to additional vulnerable occupations, increase rural housing refinance support via the National Housing Bank and propose a new urban housing fund, alongside converging multiple schemes into an integrated social security package for the unorganised sector.

Clarity in tax laws promotes a stable tax regime, non-adversarial administration, fair dispute resolution and judicial independence.
Tax proposals are guided by five parameters: clarity in tax laws, a stable tax regime, non-adversarial tax administration, a fair mechanism for dispute resolution, and an independent judiciary, collectively informing direct and indirect tax policy.

Customs duty increases on luxury imports; concessions extended for green vehicle parts and MRO, baggage jewellery limits raised.
Customs duty increases apply to imported luxury goods including high-end motor vehicles, large-capacity motorcycles and yachts by raising applicable tariff rates. Concessions for specified parts of electric and hybrid vehicles have been extended to encourage manufacture, and targeted concessions are granted to the MRO industry. The duty-free jewellery allowance for eligible passengers has been increased with distinct limits for male and female travellers, subject to the usual conditions.

Tax administration reform: Commission to review and recommend improvements to tax policy application and system capacity.
Establishment of a Tax Administration Reforms Commission to review the application of tax policies and tax laws and to submit periodic reports with implementable recommendations to strengthen the capacity of the tax system and align it with best global practices.

Direct Taxes Code framed as a new international practice based tax code, not a mere amendment to existing law.
Work on the Direct Taxes Code (DTC) is proceeding as a new comprehensive tax code aligned with international practices rather than an amendment to the Income Tax Act, 1961; the Standing Committee on Finance has submitted its report and the Ministry of Finance is examining its recommendations with a view to reintroducing the Bill during the Budget Session.

Customs duty adjustments reshape export incentives and import protection, altering tariffs for manufacturing inputs and mineral exports.
The Budget adjusts indirect tax measures: it reduces duty on specified machinery for leather manufacture and on pre-forms of precious and semi-precious stones and withdraws export duty on a particular oilcake to promote exports. It raises duties to protect and encourage domestic production by increasing import duty on set top boxes and raw silk. Export duties are imposed on unprocessed and upgraded ilmenite to conserve resources, and customs and countervailing duties on steam and bituminous coal are equalised.

General Anti-Avoidance Rules: modified provisions to be implemented, preserving GAAR's core purpose after stakeholder consultations and committee recommendations.
Modification of General Anti-Avoidance Rules to take effect on 1 April 2016 is proposed in the Finance Bill 2013, incorporating Government decisions announced following an expert committee review and stakeholder consultations into the Income-Tax Act; the modified provisions preserve the basic thrust and purpose of GAAR.

Tax on interest for rupee long term infrastructure bonds reduced, easing withholding to encourage investor participation.
The Finance Bill 2013-14 reduces the tax deducted on interest paid on investments made through a designated bank account in rupee denominated long term infrastructure bonds, aligning the treatment with a prior concession for non resident investors and aiming to attract increased investment into such bonds.

Tax deduction eligibility under Section 80-D expanded to cover state and central health schemes similar to CGHS.
The Finance Bill 2013 proposes extending the tax deduction under Section 80-D to contributions made to Central and State Government health schemes similar to the Central Government Health Scheme (CGHS), and makes contributions to the National Children's Fund eligible for full deduction.

Voluntary compliance scheme allows defaulters to declare and pay service tax with waiver of penalties and interest.
A one time Voluntary Compliance Encouragement Scheme permits registered service tax defaulters to file truthful declarations and pay outstanding dues in one or two instalments by prescribed dates with waiver of interest, penalty and related consequences. Concurrently, two services are added to the negative list, copyright exemption for cinematography is limited to cinema hall exhibition, all air conditioned restaurants will be taxed uniformly, and the abatement for large homes and flats is reduced while low cost housing and single residential units remain exempt.

Permissible premium increase for disabled policyholders allows higher premiums relative to sum assured for policies issued after the new effective date.
The Finance Bill 2013 proposes relaxation of eligibility conditions for life insurance policies for persons with disabilities or certain ailments by increasing the permissible premium rate as a proportion of the sum assured, with the relaxation applicable only to policies issued on or after the stated effective date.

Excise duty changes: zero duty route for garment value chains and selective increases on luxury and tobacco goods.
The budget restores a zero excise duty route for the cotton and spun yarn value chain alongside the CENVAT route, removes excise on handmade carpets and ships, raises specific duties on tobacco products and increases excise on high-value mobile phones and SUVs while retaining concessional rates for low-cost phones and taxis; marble duty is raised, silver from zinc or lead smelting is aligned with other silver duties, and branded traditional system medicaments will be MRP-assessed with an abatement.

Tax to GDP ratio: policy focus on restoring prior tax buoyancy to strengthen revenue mobilisation and fund development.
Increasing the Tax to GDP ratio is identified as a central fiscal objective, with the Budget emphasising that current tax buoyancy is insufficient to finance inclusive and sustainable development; the statement records a previously higher peak for the aggregate tax ratio and asserts a short term aim to restore that level by strengthening tax policy and administration to improve revenue mobilisation.

Regulatory authority for road sector to tackle construction risk and contract management, enabling expedited project awards.
Constitution of an independent regulatory authority for the road sector to remove bottlenecks and address financial stress, construction risk and contract management issues; and immediate award of 3,000 kilometres of road projects across specified states within the first six months of 2013-14 to expedite project delivery.

Tax parity for investment funds ensures equal tax treatment of distributed income and interest to non-residents; investor protection funds exempt.
The Finance Bill 2013 proposes parity of taxation by subjecting distributed income from an IDF-Mutual Fund and interest paid by an IDF-NBFC to non-residents to the same tax rate of 5 percent, and proposes that an investor protection fund created by a depositor to protect beneficial owners' interests shall be exempt from income tax.

Securitisation trust tax exemption enables tax only on distributions, preserving tax-free receipt of trust income by investors.
The Finance Bill 2013 proposes exempting the Securitisation Trust from income tax to facilitate asset securitisation via a special purpose vehicle. Tax liability arises only at the time the trust distributes income, with tax charged on distributions to recipients classified as companies and to recipients who are individuals or Hindu Undivided Families; no further tax will apply to investors on amounts received from the trust.