India Union Budget 2014-2015 - Quick Overview

Around 1.2 billion people comprise the largest democracy of the world. After a resounding victory, the new government which came in to power based on its promises of development presented its first budget on July 10th, 2014. The same received the president’s assent and became applicable from 6th August, 2014. The following are highlights of India's 2014 budget:

Changes made in Direct taxes:

1.) The self-occupied house property loan interest deduction limit saw a welcome raise to Rs. 2 Lakhs from Rs. 1.5 Lakhs.

2.) Investors in foreign portfolio will now face capital gains tax for security transactions.

3.) An amendment was made to the scheme u/s 32 AC of I.T. Act, 1961, as a tax incentive to manufacturers. The ambit for investment allowance to manufacturers for purchase of new assets was brought down from Rs.100 crores to Rs.25 crores.

4.) CSR expenditure will no longer be deductible in for the purpose of taxable income determination.

5.) The basic exemption limit for Individual (personal) tax payers ( women assesse included) below 60 years in age rose to Rs. 2.5 Lakhs from Rs.2 Lakhs and for senior citizens in the age bracket of 60 to below 80 years – from Rs. 2.5 Lakhs to Rs. 3 Lakhs with no change in tax rates.

6.) The limit in the 2014 India budget for investments eligible u/s 80 C has also been raised to Rs. 1.5 Lakhs from Rs. 1 Lakhs.

7.) The ceiling limit for wages and salary for Provident Fund has been raised to Rs. 15000 from Rs. 6500. The minimum month on month payment for pension has also been raised to Rs.1000 for subscribers of Employees Pension scheme which is managed by the Employees Provident Fund Organisation.

Changes made in Indirect Taxes:

1.) Basic customs duty was reduced to further domestic manufacture.

2.) To motivate production of LED and LCD televisions, Basic customs duty now nil from 10% before.

3.) In order to motivate exports, semi-precious and precious stone pre form are now exempted from basic duty of customs.

4.) Free Baggage Allowance hiked to Rs.45, 000 from Rs. 35,000, to facilitate passenger travelling.

5.) Excise reduced to 6% from 12%, for foot wear costing more than Rs.500 but up to Rs.1,000/-.

6.) Excise Duty increased, on Specific sizes of cigarettes from 11% to 72%, on pan masala 12% to 16%, on tobacco (for chewing) and Gutkha – 60% to 70%.

The 2014 budget highlights addressed many issues but was similar to budgets which came from the earlier government and could not deliver the expected ground breaking policy paradigm shifts.

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