Country's largest carmaker Maruti Suzuki India (MSI) reported a 5.5 percent decline in total sales in March at 1,13,350 units as against 1,19,937 units in the same month last year. The company said its domestic sales declined  by 5.2 percent during the month to 1,02,269 units as against 1,07,890 units in March 2013. Sales of mini segment cars, including M800, Alto, A-Star and WagonR, declined by 11 percent to 40,085 units as compared to 45,047 units in the year-ago month, MSI said in a statement.
The company said sales of the compact segment comprising Swift, Estilo, Ritz rose by 9.3 percent to 28,285 units in March this year as against 25,868 units last year, reports PTI. 12:50pm HSBC's India manufacturing PMI down in March HSBC's India manufacturing PMI declined in March at 51.3 versus 52.5 in February, but remained above the waterline, indicating positive growth. "Growth in the manufacturing sector eased on the back of weaker growth in output and a slowdown in order flows from domestic clients.
By goods, consumer goods firmed, but the production of investment goods remains subdued according to panellists. Looking ahead, the recovery is likely to prove protracted. Meanwhile, inflation eased in March, with the PMI index for input and output prices falling," the HSBC report said.
12:45pm Expert on RBI policy Kunal Shah, fund manager-debt, Kotak Mahindra Old Mutual Life Insurance said, "RBI has maintained status quo as per our and consensus expectations, though not clearly spelled out in policy but RBI is incrementally concerned about sticky growth underperformance." According to him, RBI has hinted that lead indicators do not point to any sustained revival in industry or services & hence believes that slower activity will help disinflate the economy which will support the fight against inflation. "Till these processes evolve RBI feels current policy rates are appropriate and may not require further tightening," he added. "We expect current disinflation process to continue and core inflation to moderate further however sharp fall is unlikely in short-term. Monsoon will be key to watch as it can create short-term volatility in inflation path," Shah said.
12:40pm Rate hike unlikely if inflation does not rise further The Reserve Bank’s policy stance will be firmly focussed on keeping the economy on a disinflationary glide path that is intended to hit 8 per cent CPI inflation by January 2015 and 6 per cent by January 2016, the central bank said. It further said that at the current juncture, it is appropriate to hold the policy rate, while allowing the rate increases undertaken during September 2013-January 2014 to work their way through the economy. Furthermore, if inflation continues along the intended glide path, further policy tightening in the near term is not anticipated at this juncture, the RBI said.
12:35pm RBI says Since December 2013, the sharper than expected disinflation in vegetable prices has enabled a sizable fall in headline inflation. Looking ahead, vegetable prices have entered their seasonal trough and further softening is unlikely. Meanwhile, CPI inflation excluding food and fuel has remained flat. There are risks to the central forecast of 8 percent CPI inflation by January 2015 stemming from a less-than-normal monsoon due to possible el nino effects; uncertainty on the setting of minimum support prices for agricultural commodities and the setting of other administered prices, especially of fuel, fertiliser and electricity; the outlook for fiscal policy; geo-political developments and their impact on international commodity prices. 12:30pm Market falls further, banks extend losses Equity benchmarks extended losses in afternoon trade weighed down by banking and financial stocks.
The Sensex is down 81.76 points to 22304.51 and the Nifty down 20.25 points to 6683.95. India's biggest lender State Bank of India plunged 2 percent while rival HDFC Bank slipped 1.9 percent. Top private sector lender ICICI Bank and housing finance company HDFC dropped over a percent. Shares of L&T, ITC, HUL, Bharti Airtel, Maruti Suzuki, Bajaj Auto, BHEL and Coal India declined over 1 percent.

However, TCS held its early gains, up 2 percent followed by Wipro and ONGC with more than 1.5 percent. Infosys and Tata Motors climbed over 0.5 percent. 12:25pm RBI says Retail inflation measured by the consumer price index (CPI) moderated for the third month in succession in February 2014, driven lower by the sharp disinflation in food prices, although prices of fruits, milk and products have started to firm up. Excluding food and fuel, however, retail inflation remained sticky at around 8 percent. This suggests that some demand pressures are still at play.
12:20pm RBI increases the liquidity provided under 7-day and 14-day term repos from 0.5 percent of net demand and time liability (NDTL) of the banking system to 0.75 percent. It decreases the liquidity provided under overnight repos under the liquidity adjustment facility (LAF) from 0.5 percent of bank-wise NDTL to 0.25 percent with immediate effect.
12:15pm Rajan says the bank may need to push foreign banks to follow subsidiary model. Foreign banks avoid subsidiary route on priority sector norm, he adds.
12:10pm While addressing press conference after an announcement of bi-monthly review, RBI governor Raghuram Rajan said the bank had responded to Election Commission queries on banking licences. "We took Election Commission (EC) opinion on banking licences to stay away from controversy. Bimal Jalan had also suggested getting EC nod for banking licences," Rajan said. He further said the window for differentiated banking licences would be opened soon. 12:05pm Reserve Bank of India kept repo rate, at which banks borrow money from RBI, unchanged at 8 percent and cash reserve ratio at 4 percent. The central bank also left marginal standing facility rate and bank rate unchanged at 9 percent.
12:00pm The market remains volatile after the Reserve Bank of India kept policy rates unchanged that is in-line with expectations. The Sensex slips 15.12 points to 22371.15 and the Nifty declines 4.75 points to 6699.45. About 1174 shares have advanced, 1042 shares declined, and 131 shares are unchanged.   Top lenders State Bank of India, ICICI Bank and HDFC Bank decline 0.5-0.8 percent. Housing finance company HDFC slips 0.66 percent. State-run power equipment maker BHEL drops 1.7 percent, and engineering and construction major L&T is down 1.3 percent.

Media plays an important role in helping political parties interact with voters and most of the parties are now using the print media, television, radio and other social networks like Facebook, Twitter and WhatsApp to convey their messages to their prospective voters.
It is true that this would translate into huge revenue growth for the media industry at large. Also, it is expected that the formation of a stable government at the Centre post-election would result in a series of reforms to boost the economy and this would further enhance the revenue growth prospects of the industry. 
However, the sluggish economic growth and a decrease in consumer spending have strained advertisers, leading them to cut promotional budgets. This has adversely affected the media industry. 
As the election is around the corner, media stocks have become attractive to investors and some of the media stocks have witnessed smart gains since the Election Commission (EC) announced the schedule for the general election on March 5, 2014.
Also, the fast moving consumer goods (FMCG) companies are raising their advertising expenditure, which is expected to further boost the performance of the media companies.
Almost 75 per cent of television advertising is concentrated over just three categories -- FMCG, telecom and auto -- while FMCG continues to dominate television advertising. 

Nandan Chakraborty, MD, Institutional Equity Research, Axis Capital recommends investors to have a judicious mix of defensives and cyclicals in their portfolios now.
Sharing views on the current market rally, Chakraborty told CNBC-TV18 that in upmoves, consumer discretionary and BFSI stocks rise first. He expects 15 percent growth in Sensex levels by year-end. He sees big upside in select engineering and infrastructure  stocks.
Also, certain pockets of banking stocks may see large upmove going ahead. From the PSU banking pack, he is positive on  SBI  and PNB  . One can bet on auto ancillary stocks like  Motherson Sumi  in the midcap auto space, he added.
 Further, he added that earnings upgrade is seen only for companies with improvement in balance sheet, he said. Meanwhile, he expects further appreciation in the Indian currency.

IDFC and L&T Finance Holdings extended gains to 6 percent and 4.6 percent, respectively on hopes of banking license. 
The decision of whether to issue banking license or not during elections period is in hands of Election Commission and not the government. 
Election Commissioner VS Sampath on Tuesday said he has not taken a final call on the banking license issue. "
We will take up this issue on Monday," he added. Election Commission has raised legal ethical issues on banking licenses matter. 
12:20pm Talwalkars in focus Shares of Talwalkars Better Value Fitness rose 11 percent as buzz of stake sale gathered steam. According to media reports UK's health and fitness group David Lloyd is looking to buy 20 percent stake in the Indian health and fitness company. "The management of David Lloyd is in talks to pick up an equity stake in Talwalkars. This will help both companies to expand their current relationship," the report quoted an investment banker. 
12:10pm FII View Credit Suisse is bullish on India and considers elections to be a turning point for the country. Speaking exclusively to CNBC-TV18 on the sidelines of the Credit Suisse Asia Conference in Hong Kong, Sakthi Siva, Asia Strategist, Credit Suisse said that atleast 5-10 percent upside in the Indian market is possible from current levels in the near-term. Siva is quite confident that though India’s growth last year was the lowest in the past 10 years, but with politics, potential change, there could be a turning point for the Indian market and the economy. 
12:00pm The market extended an upmove in noon trade with the Sensex rising over 100 points supported by banks, capital goods and auto stocks. The Sensex rose 107.58 points to 22202.88 and the Nifty climbed 38.45 points to 6639.85. About 1468 shares have advanced, 869 shares declined, and 141 shares are unchanged. Top lender State Bank of India jumped 3.5 percent after Goldman Sachs has upgraded the PSU bank to buy from neutral rating and revised target price to Rs 2,080 from Rs 1,440 apiece. 
PNB and Bank of Baroda gained 2.5-3 percent while rivals HDFC Bank and ICICI Bank advanced 0.7 percent each. Axis Bank rallied 2 percent. Brokerage house Morgan Stanley added Axis Bank to its Asia ex-Japan model portfolio. The firm is positive on the stock given company's reducing risks in books. 
Telecom operator Bharti Airtel surged 3 percent followed by Hindustan Unilever, M&M, Hero Motocorp, BHEL and NTPC with 1-2 percent. However, state-run oil & gas major Oil and Natural Gas Corporation's stock (ONGC) is quoting ex- dividend today. It fell nearly a percent. The board of directors on March 24 have approved second interim dividend of Rs 4.25 per equity share of Rs 5 each for the financial year 2013-14.  
 Drug majors Sun Pharma and Dr Reddy's Labs declined more than 1 percent. Dr Reddy's Labs has launched Amlodipine Besylate (to treat high blood pressure) and Atorvastatin calcium tablets in US market.

Today the global scenario looks favourable, which may result in positive opening of the Indian markets. SGX Nifty is also trading 31.00 points higher.
Global Market
Asian shares raced to two-week highs on Wednesday, with investor confidence getting a much needed boost from upbeat U.S. data and lingering hopes China may take steps to stimulate its sagging economy.
US stocks Tuesday finished a choppy trading session higher, boosted by stronger-than-expected consumer confidence data. The main indexes recorded small gains after two days of losses.
European shares rebounded on Tuesday, anticipating of stimulus measures from the European Central Bank (ECB) and the Chinese central bank to help their economies fight off any slowdown.
Levels to watch out:
Supports @ 6570 - 6540 - 6510
Resistance @ 6600 - 6650 - 6680

10:30am Oberoi Realty jumps over 10%
 Oberoi Realty bought Tata Steel’s defunct manufacturing plant in Borivali, a western suburb in Mumbai. Oberoi Realty jumped 10 percent while Tata Steel rose 2 percent after the real estate developer announced buying the 25-acre land for Rs 1155 crore through e-auction
"The Committee of Independent Directors appointed for the oversight and governance of the sale process by the Tata Steel Board declared Oberoi Realty Limited as the highest bidder of the auction on the basis of their final bid of Rs 1,155 crore, after several rounds of bidding," Tata Steel said in a statement

The biggest near-term catalyst for the Indian market is the upcoming general election and the current rally is seen as the one fuelled by hope of a stable government. Gautam Chhaochharia, head of India research of UBS Securities sees the Nifty touching 6,900 on favourable election outcome.
Speaking to CNBC-TV18, he said, sector rotation will take front seat and this up move will be lead by cyclicals largely banks, which have a considerable weightage in the index. Other sectors like industrials and power would also perform well.
Traders who are looking to play recovery in the capex cycle theme can buy infrastructure stocks, but from six months – two years perspective, one should be cautious because on the ground revival in the sector will take a longer time.  L&T and  BHEL are his top picks from the capital goods space. He likes  Voltas  from the midcaps.
 UBS prefers sticking to private sector lenders and is underweight on public sector banks, however, those interested in investing in this space can consider PNB , which looks good from a valuation perspective, he said.
He is overweight on the IT sector from a strategy perspective and expects recovery in US and Europe to aid the sector. Giants  TCS and  Infosys are his top bets. However, he cautioned that sector rotation can drag IT services. Recent rupee appreciation and hopes of economic recovery has led investors to take money from this safe heaven sector to cyclicals.
Meanwhile, he expects the gas price hike to eventually go through. He is positive on  ONGC and RIL .  From the media space, he is positive on Sun TV , Dish TV and Hathway .
Continuing his bullish tone, he added that correction steps taken by previous government have given confidence in the Indian economy. He feels that bulidimng blocks for economic growth are in place. The broking firm is constructive on Indian market from a two-three year perspective

MCX | Financial Technologies | Arshiya International | ONGC | ACC | Tech Mahindra | United Spirits | Dabur India | PNB | Tata Power | Mahindra & Mahindra Financial Services | Bharti Infratel | Mindtree and Axis Bank are stocks, which are in the news today.

NEW DELHI: Indian markets are expected to trade higher on Saturday in absence of any major global cues. The key support for the index is around 6,430 levels.
"The Nifty is expected to trend up till 6575 in the next couple of days. In this period the key support will be at 6430 and resistance will be at 6575," said Somil Mehta, Senior Tech Analyst (Equity) at Sharekhan
"The Nifty has been forming higher tops and higher bottoms; it has also closed above the previous swing's high which is a positive sign for the market," he added.
Mehta is of the view that the short-term bias remains positive for a target of 6600 with reversal at 6430. The medium-term outlook remains positive as the index has started forming higher tops and higher bottoms on the weekly charts

Here is a list of ten stocks which are likely to be in focus in trade Today .. 

UMBAI/NEW DELHI: The government on Friday raised as much as $1.4 billion through share sales, in a push to shore up state finances before it heads into a tough parliamentary election next month

As a result, New Delhi managed to exceed its sharply-lowered budget target to raise as much as $3.1 billion via stake sales in some private as well as state companies in the fiscal year to March 31, after years of falling short.
Some analysts hope the new government, taking office in May, will speed divestments to bolster revenue generation and trim the budget deficit, as part of efforts to revive slowing economic growth.

Finance Minister P. Chidambaram had penciled nearly $9 billion in divestment revenues into his budget for this fiscal year, but slashed that figure last month to $3.1 billion.

He also set an ambitious target of raising $8.5 billion from further share sales in the next fiscal year, but this estimate could be revised by a possible successor after the election.

"With the next government in place, one would only expect better fortunes from stake sales," said N.R. Bhanumurthy, an economist at the National Institute of Public Finance and Policy think tank.

 "A recovery in growth sentiment in the market should help sell stakes quite early in the next fiscal year to meet the target."

Here are experts’ equity calls for the day on how the market is expected to trade:

Ridham Desai, Morgan Stanley: Market is prepping for a macro trade as evident in low stock correlations and high relative volatility. The implied volatility levels are low and given relative valuations, the direction of this macro trade could be down. We are overweight on technology, telecom, consumer discretionary and energy. We remain underweight on banks, industrials, consumer staples and utilities.

Sanjeev Prasad, Kotak Institutional Equities: The reward-risk balance for the Indian stock market is less favourable after the sharp run-up in prices of several domestic cyclical and PSU stocks. Current stock prices already discount FY15 EPS for most large-cap stocks. Earnings upgrades will largely depend on favourable government action in a few sectors, which depend on favourable election outcome and continuation of reforms

NEW DELHI:
The S&P BSE Sensex snapped three-day winning streak and is trading lower in trade on Thursday, led by losses in ITCBSE -1.81 %, L&T, HDFCBSE -1.73 % and ICICI BankBSE -0.75 %.

Tracking the momentum, the 50-share Nifty index was trading near its key support levels of 6500, led by losses in FMCG, auto, oil & gas and auto stocks.

At 11:50 a.m.; the 30-share index was at 21,825.74, down 7.8 points or 0.04 per cent. It touched a high of 21,853.25 and a lo ..

Sun Pharma Ltd is a 'BUY' call with a target of Rs 610 and a stop loss of Rs 585

Aurobindo Pharma LtdBSE 1.02 % is a 'BUY' call with a target of Rs 545 and a stop loss of Rs 520

Bank of BarodaBSE -3.07 % is a 'SELL' call with a target of Rs 625 and a stop loss of Rs 655

BHELBSE -2.50 % is a 'SELL' call with a target of Rs 178 and a stop loss of Rs 191
Titan Company Ltd is a 'BUY' call with a target of Rs 275 and a stop loss of Rs 250

HULBSE 1.73 % is a 'BUY' call with a target of Rs 587 and a stop loss of Rs 560

Tata Communications LtdBSE 1.70 % is a 'BUY' call with a target of Rs 309 and a stop loss of Rs 285

Karnataka BankBSE 0.78 % is a 'BUY' call with a target of Rs 118 and a stop loss of Rs 108.75

HUL is a 'BUY' call with a target of Rs 590 and a stop loss of Rs 561

Lupin LtdBSE 0.85 % is a 'BUY' call with a target of Rs 980 and a stop loss of Rs 938

Tata Communications Ltd is a 'BUY' call with a target of Rs 305 and a stop loss of Rs 288

IDBI BankBSE -1.18 % Ltd is a 'BUY' call with a target of Rs 70 and a stop loss of Rs 56

Sesa Sterlite Ltd is a 'BUY' call with a target of Rs 190 and a stop loss of Rs 168

Tata Communications Ltd is a 'BUY' call with a target of Rs 340 and a stop loss of Rs 280

Torrent PowerBSE 0.43 % Ltd is a 'BUY' call with a target of Rs 95 and a stop loss of Rs 76

Hitachi Home Ltd is a 'BUY' call with a target of Rs 210 and a stop loss of Rs 165

Here is a list of ten stocks which are in focus in trade today:

Goldman Sachs has upgraded India to 'overweight' and has put an aggressive target of 7,600 for the Nifty in the next 12 months, which implies 17% upside from current levels.

Citing the reasons for the same, the global investment bank said in a report: "The cyclical macro adjustments in India have reduced external vulnerability. We now expect domestic fundamentals to improve as growth recovers in 2Q. Corporate earnings downgrades seem to have bottomed out, with more signs of improvement in the investment cycle. Headline valuations have recently expanded but cyclical sectors remain inexpensive compared to history and are relatively under-owned."

The Indian stock markets today extended gains and hit fresh all-time high as inflows continued on the back of positive cues from global markets. The benchmark Sensex was trading above 22,000.

Banks, auto oil & gas and realty sectors were the top sectoral performers in intraday trade.

Goldman said the upcoming parliamentary elections in April could have an impact on reforms progress.

First week of March heals Budget wounds; Markets surge 4%

Indian Markets posted a smart recovery in the week ended March 08, 2013. The S&P BSE Sensex gained 4.04%, while NSE Nifty rose 3.95% in the week.

Major Headlines for the week: ECB slumps 17% during Apr-Jan 2012-13  HSBC Services PMI for Feb falls to 54.2  Fiscal deficit in 2012-13 may be less than 5.2%: FM Parliament OKs extra spending on oil subsidies Indian indices: The Indian markets ended the first week March 2013 on a cheerful note. A flurry of good newsflow boosted investor sentiment this week. Markets bounced back this week as investors picked up stocks that were beaten the most in recent days. Tremendous buying interest throughout the week helped the markets rise after five consecutive weeks of losses. The Indian equities were volatile throughout the week. The S&P BSE Sensex ended at highest level since February 04, 2013 after posting biggest weekly gain since November 30, 2012. The Sensex gained over 500 points in the last three sessions tracking gains in global stocks. Markets ended this week on a buoyant note led by strong global cues. Reflecting the positive price movements, the markets gained in four out of five trading sessions of the week. This was the 10th trading week of 2013. The S&P BSE Mid-Cap index gained 2.63% and the S&P BSE Small-Cap index advanced 2.23%. Both these indices underperformed the Sensex. Adding further, Nikkei was the topmost gainer up by 5.84% as compare to all global indices on weekly basis. The BSE Sensex jumped 764.71 points or 4.04% to settle at 19683.23 while NSE Nifty gained 226 points or 3.95% to settle at 5,945.70 in the week ended March 08, 2013. Weekly market trend from March 04-08, 2013:  On Monday, (March 04, 2013), the Indian markets closed in the red zone as the equities traded on a subdued note led by sell-off in metal and mining stocks after China tightened mortgage rules to cool the property market. Moreover the sentiments were dampened as the US fiscal crisis threatened the global economy amid fear over resurgence of euro-zone crisis after joblessness in the region rose to an all-time high. The Sensex closed at 18877.96, down by 40.56 points and the Nifty fell 21.20 points to settle at 5698.50. Domestic markets ended over 1% higher on Tuesday (March 05, 2013), on growing hopes that the RBI will cut interest rates later this month, which boosted rate-sensitive stocks. Heavyweights were the major contributors in today's gaining spree. The positive global cues also joint the rally. The Sensex wrapped trade at 19143.17, up by 265.21 points while the NSE Nifty rose 85.75 points to settle at 5784.25. On Wednesday, March 06, 2013, rally on the Dalal Street was bolstered by strong buying across the board backed by surge in FII inflows into the real-estate, banks and automobile stocks. Majority of the sectors were under the buyer's radar. The BSE Sensex ended at 19,252.61 up by 109.44 points and the NSE Nifty settled at 5,818.60 up by 34.35 points. On Thursday, March 07, 2013, key indices opened on a negative note as investors booked profit in riskier assets after two-day rally and amid caution on global growth concerns. The indices remained volatile in a narrow range for major part of the day, swinging between gains and losses. The market sentiments got boosted after the positive opening of European markets. The S&P BSE Sensex wrapped trade at 19413.54, up by 160.93 points while the NSE Nifty rose 44.70 points to settle at 5863.30. On Friday, March 08, 2013, the S&P BSE Sensex and NSE Nifty rose by 1.4% as lenders gained on growing hopes that the central bank will cut interest rates, while energy stocks rose as the government sought to spend more on oil subsidies. The markets maintained its uptrend for the fourth consecutive session. The S&P BSE Sensex wrapped trade at 19,683.23, up by 269.69 points while the NSE Nifty rose 82.40 points to settle at 5,945.70. Global indices Majority of the global markets closed in the green territory except Shanghai Composite which was down by 1.73%. Top Gainers: Nikkei up by 5.84%, Dax100 up by 3.00% and CAC40 up by 2.54%. Sectoral and stock screening Majority of the sectors closed in green, barring BSE CD down by 1.99%. Top Gainers - BSE Realty jumped by 7.42%, BSE Bankex advanced by 5.50% and BSE CG up by 5.31%.

Headlines for the day

• HDFC Bank raises $500 mn in overseas bond sale at 3% coupon
• MMTC stake sale on March 14, could fetch Rs300 cr
• 5-6% growth not sufficient: RBI Governor
• NTPC plans Rs20,200 cr capex for 2013-14
  
  
  INDIAN INDICES
• The Indian equities may start the trading session on a soft note tracking unsupportive global cues. SGX Nifty is also trading 31.50 points lower.
  
  On Friday (March 04, 2013), the Sensex closed at 18918.52, up by 56.98 points while the Nifty settled at 5719.70 rising by 26.65 points. 
• Daily trend of FII/MF investment in equities
  
  The FIIs have been the net sellers Indian stocks to the tune of Rs1274.60 crore on February 28, 2013. The domestic investors bought Indian shares worth a net of Rs470.40 crore on February 28, 2013.The data is as per the SEBI website.
  
  GLOBAL INDICES
• Asian shares eased on Monday (March 04, 2013), with sentiment hurt by a patchy global growth outlook and weak data from Europe, but losses were limited as robust U.S. economic figures overshadowed worries about automatic spending cuts hurting the U.S. economy.
  
  European shares edged lower on Friday (March 01, 2013), impacted by weaker bank and mining stocks, and traders expected equities to stay trapped in a tight range this month with uncertainty over Italian elections denting sentiment.
  
  US stocks advanced modestly on Friday, leaving the S&P 500 with slight gains in a volatile week as strong economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected government spending cuts.

1. Live with the Retro Effect

The 2012 Budget introduced retrospective amendments to tax indirect transfers and income of software and satellite companies. Foreign companies earning revenues from software licences and satellite services that were wrapped in a cocoon of double taxation avoidance treaties were not hurt. But may were not so lucky. This year's Budget was expected to remove this dreaded "retrospectivity" element, keeping in mind the global sentiment.

But that hasn't happened. What could happen is companies unprotected by treaties would challenge these amendments on the grounds that they are arbitrary, unreasonable and violate Article 14 of Constitution. It could be argued that these amendments were not "clarificatory" as made out to be during their introduction. Rather, a new tax was introduced retrospectively under the garb of clarifications. The ball is in the court of the courts.

2. Royalty gets Costlier

So far, foreign companies that provide royalty or technical support to Indian businesses were taxed at the maximum rate of 10%. This year's Budget has increased this to 25%. But foreign companies are likely to pass the tax liability to the recipient of the service and so the cost of availing royalty/technical support will be more painful for Indian companies.

Assuming a 15% rate in tax treaties with the US, the UK and Australia , the additional tax cost could rise by 6.53% if the Indian company was to bear the tax. This might force businesses to explore entering into such agreements in favourable jurisdictions where the treaty rate is 10%.

3. Setback for Buyback

By now, you know that high-end phones and SUVs will be costlier. But Budget 2013 will also be remembered for making shopping of a different kind more expensive -buyback of shares. The FM has proposed to tax the income of shareholders who buy back shares of unlisted domestic companies. Significantly, the scope of the tax has been transferred from shareholders to the company distributing profits through buyback.

The rate is pegged at a radically high 20%, payable on the difference between the price on share buyback and the initial issue price. The levy can be compared to tax on dividends distributed by domestic companies at present. The impact on foreign investors based out of countries having a favourable tax treaty with India seems significant because the free repatriation of surplus would no longer be possible. The move to tax the company would deny benefits of a treaty to most investors.

4. You "Super-rich"? Ouch!

The Budget ended up taxing the "super-rich", as was widely expected. The surcharge on the "super-rich" — those with an income of Rs 1 crore — borrows a page from other developed countries like the US and France. The effective tax rate for such individuals is due to be increased to 33.99% from 30.9%.

Further, by increasing the duty on items like SUVs, the government has revealed its intention to tax the wealthy. Yet, the government might rethink the Rs 1 crore income limit simply because it is too low a limit. The income limit might be raised to Rs 5 crore and the surcharge reduced to 5% from 10%.


5. There are Free Lunches. Really!

The Budget was expected to be populist thanks to the approaching elections. You could have been forgiven for expecting an increase in the exemption limit and incentives to reduce the tax burden. Nothing of the sort happened. The Budget provided only a marginal relief in the form of a rebate of up to Rs 2,000 to individuals whose total income does not exceed Rs 5 lakh.

The rebate will be equal to the amount of income tax payable on the total income or an amount of Rs 2,000, whichever is less. For a family, this is equivalent to a couple of meals in a budget restaurant. Given the soaring food prices, the finance minister should increase the exemption limit to Rs 3 lakh.

6. Dream House? Dream on

Those looking to buy a spacious apartment, which was already beyond the reach of the common man, has received another jolt from the finance minister. The budget has raised the service tax cost for a residential property under construction. Currently, service tax was levied on 25% of the value of an apartment under construction.

From March 1 onwards, service tax would apply on 30% of the value of the property and services availed for its construction. That means all such properties that cost Rs 1 crore or more or have a carpet area of more than 2,000 square feet would become more costlier. In real terms, the cost of service tax for a Rs 1-crore property will increase by Rs 61,800. This move is targeted at high-end construction where the component of 'service' is greater.

7. Eating Out? Pay (a Little Bit) More

The FM has been looking for new pastures to collect more revenue. He knows that you are increasingly eating out. He also realised that try as you might, you will still go to a restaurant or a cafe. There, now it's going to cost you. Starting from April 1, serving food at any restaurant, food joint and eatery that has installed an air-conditioner will be subject to service tax. This levy, introduced in 2011, applied to only those AC restaurants that also served alcohol so far.

Service tax would be levied on the total amount billed minus the abatement of 60% allowed in the law. This means that 40% of the total bill would be treated as a service provided to you by the restaurants. So an average bill of Rs 1,000 will now cost Rs 49.44 more. Question is will that stop you from eating out. The FM

8. Shop More for Branded Clothes...

Good news for all brand-conscious shoppers. Manufacturers of branded readymade garments that are not availing the Cenvat credit facility have been exempted from payment of central excise duty. This duty was levied in 2011. This relief is expected to boost the sales of branded garments as manufacturers will surely pass on the benefit to end buyers. The exemption from duty is applicable from March 1. Happy shopping!.

9. But Forget the Luxury Car, Bike or Yacht

As we said, the FM's target this year was clearly the super-rich. His rationale: they won't mind paying more. So he raised the import duties on high-end motor cars having CIF (Cost, Insurance and Freight — contracts involving international transport) value of more than $40,000 or having an engine capacity of more than 3,000cc for a petrol engine or more than 2,500cc for a diesel engine to 100% from 75%. But note: the increased duty rates apply only vehicles imported other than in CKD (fully disassembled) form.

It means the FM wants more automobile companies to establish manufacturing facilities in India. He has also raised the import duties on yachts or motorboats or canoes or similar vessels to 25% from 10%. This is besides raising the rate of excise duty on SUVs (that have ground clearance exceeding 170 mm) from 27% to 30%. It is another matter that higher ground clearance was necessary due to Indian road conditions. Today, it has become a tax condition.

10. More Gold in Your Bag

His mind on galloping gold prices, the FM has increased the duty-free limit of bringing jewellery into India by five times. That means from March 1, an individual who was residing overseas for over a year and is coming to India can bring more gold jewellery duty free. For men, the duty-free limit has been increased for jewellery worth Rs 50,000.

For women, the limit has been increased to Rs 100,000. The FM has effectively ended an archaic rule. The previous import limits for gold jewellery were fixed in 1991. Needless to say, this was out of sync with the current market prices of gold. NRIs will cheer the move.