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Highlights of Indian Union Budget 2014-2015 – Summary of key proposals

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Budget-2014-2015

Highlights of Indian Union Budget 2014-2015 – Announced on 10th July 2014

Personal taxation

No change in income tax rates; personal income tax exemption limit raised from Rs 2 lakh to Rs 2.50 lakh

Propose to increase investment limit under Section 80C from Rs 1 lakh to Rs 1.5 lakh

Tax exemption on interest component on housing loan raised to Rs 2 lakh from Rs 1.5 lakh

Tax exemption limit for senior citizens changed from Rs 2.5 lakh to Rs. 3 lakh

Annual PPF ceiling to be enhanced to Rs 1.5 lakh, from Rs 1 lakh

FM has taken away tax arbitrage through investment in other than equity oriented funds. While the interest on FDs etc. attract tax at say 34% , Gain on sale of Units ( beyond 12 months) attracted tax @ 10% ( + surcharge + cess). He has proposed to increase the tax rate to 20% and increase the period of holding ( to qualify as Long Term) from 12 months to 36 months. This will impact MF industry and may bring FD (and other debt products) at par . Read more about this change.

 

What will be cheaper or expensive

 Following is a list of what will be cheaper

  • CRT television
  • LED/LCD TVs especially below 19 inch
  • Footwear priced between Rs 500 to Rs 1,000 per pair
  • Soaps
  • E-book readers
  • Desktop, laptops and tablets
  • RO based water purifiers
  • LED Lights, fixtures and lamps
  • Pre forms of precious and semi-precious stones
  • Sports Gloves
  • Branded petrol
  • Matchbox
  • Life micro insurance policies
  • HIV/AIDS drugs and diagnostic kits
  • DDT insecticides

 Following is a list of what will be costlier

  •  Cigarettes
  • Aerated drinks with sugar
  • Pan masala
  • Gutka and chewing tobacco
  • Jarda scented tobacco
  • Radio Taxi
  • Imported electronic products
  • Portable X-ray machines
  • Half cut/broken diamonds.

 Corporate

10 year tax holiday for power companies who start production and distribution on  March 31, 2017

Defence FDI cap raised to 49% from 26% at present

Promote FDI selectively in sectors. India needs a boost in job creation in the manufacturing sector

All retro tax cases to be scrutinized by a high-level committee

FM Proposes to enhance the scope of income tax settlement commission

Single KYC norms for all financial services and one demat account for all financial products

We will examine proposal to give greater autonomy to banks: FM.

Budget proposes 49 per cent FDI in insurance through FIPB route

Rural housing: Rs 8000 crore for national housing banking programme

 

Budget Expenditure

Revenue deficit pegged at 2.9 per cent of GDP

Budget proposes Plan expenditure of Rs 5,75,000 crore for current ficsal.

Fiscal deficit for 2014-15 pegged at 4.3% and for next year at 3%

Aim to achieve 7-8 per cent economic growth rate in next 3-4 years: FM

 

Govt proposes to set up 100 smart cities. Govt to provide Rs 7,060 crore for development of such cities:

Airports to be developed in tier 1 and 2 cities, 16 new port projects to be awarded this year

Investment in NHAI and state highways to the tune of Rs 37,887 crore, including Rs 3000 crore for North East

Govt committed to providing 24×7 power supply to all homes: FM

Rs 500 crore for solar power development project in Tamil Nadu and Rajasthan

Rs 11,600 cr for developing outer harbour projects Rs 11,600 cr for developing outer harbour projects

Mining issues to be resolved on priority

20 new industrial clusters announced

Propose to provide finance to 5 lakh landless farmers through NABARD

Manufacturing units will be allowed to sell their products through retail and e-commerce: Jaitley.

Committed to sustaining 4% growth in agriculture, extend credit to joint farming groups

Rs 500 crore allocated for stabilizing prices of agricultural commodities

Rs 3600 cr set aside for National Rural Drinking Water: FM

FM announces development of Metro rails in PPP mode; Rs. 100 cr set aside for metro scheme in Ahmedabad and Lucknow

Each year government will be adding AIIMS to ensure there is an AIIMS in every state: Jaitley

Rs 100 crores to set up virtual classrooms

Rs 500 crores for setting up 5 more IIMs and IITs

Jaitley announces e-visas to promote tourism

The government is committed to the welfare of scheduled castes and tribes. Rs 200 crores credit scheme for start-ups by those from scheduled castes and tribes

Jaitley announces Skill India, a programme to train youth for jobs

MGNREGA programme to made more productive

Women’s safety: Rs 100 crores for Beti Bachcao, Beti Padhao Yojana

Senior Citizens Pension Plan Extended Till August 2015

allocates Rs 500 crore for internet connectivity in villages

to allot Rs 2037 crore to clean up Ganga; set up NRI fund to boost cleaning……… will be adding more

 

If you have any queries related to this article or any other personal finance query ( Investment, Taxation etc), please comment below

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The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

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