Union Budget 2014 Highlights

·        Highlights relevant to individual tax payers and salaried class tax payer:

1.      Government will not bring any retrospective amendment which is unfair to    

          the tax payers which is very positive move for the taxpayers.

2.      To encourage savings, finance minister announced some relief for individual tax payers, though he left tax rates and slabs unchanged. Mr Jaitley has raised the exemption limit by Rs. 50,000 from Rs. 2.0 lakh to Rs. 2.5 lakh a year. This means that anyone who earns less than 2.5 lakh will not be taxed; those earning more than that will save Rs. 5,150 a year.

3.      The finance minister also raised the exemption limit for senior citizens to Rs. 3 lakh.

4.      Finance Minister hiked the exemption limit on long-term financial savings i.e 80C limit by Rs. 50,000 form Rs. 1.0 lakh to Rs. 1.5 lakh a year and raised the tax-free cap on home loan interest from Rs. 1.5 lakh to Rs. 2 lakh.

5.      Finance Minister also enhanced the Public Provident Fund (PPF) ceiling from the current Rs. 1 lakh to Rs. 1.5 lakh in a financial year.

6.      There is no change in Education Cess and Surchage which is continue to be 3 percent and 10 percent.

7.      New tax slab as per the Finance Bill 2014 is given below.

      For Individuals below 60 years age (including Woman Assessees): 

Income	Tax Rate
Upto 250,000	Nil
250,000 to 500,000	10% of the amount exceeding 250,000
500,000 to 1,000,000	Rs.25,000 + 20% of the amount exceeding 500,000
1,000,000 & above	Rs.125,000 + 30% of the amount exceeding 1,000,000

      For Individuals above 60 years age and below 80 years age (including Woman Assessees): 

Income	Tax Rate
Upto 300,000	Nil
300,000 to 500,000	10% of the amount exceeding 300,000
500,000 to 1,000,000	Rs.20,000 + 20% of the amount exceeding 500,000
1,000,000 & above	Rs.120,000 + 30% of the amount exceeding 1,000,000

·        Other Highlights of the Finance Bill 2014:

1.     Basic rates of customs duty @ 10%, excise duty @ 12% and service tax @ 12% remains intact.

2.     Uniform Know Your Customer (KYC) norms for entire financial sector.

3.     Accounting Standards for Banks and Insurance sector would be notified separately.

4.     Finance Minister proposes one Demat account for all financial products.

5.     No change in tax rates for corporate tax payers.

6.      Five more Indian Institute of Technology (IITs) and Five more Indian Institute of Management (IIMs) to be set up allotting Rs. 500 crore for this.

7.      Rs. 100 crores for Metro in Lucknow and Ahmedabad.

8.      Allocates Rs. 400 crores to incentivize the development of low cost housing.

9.      Rs 500 crores for solar power development project in Tamil Nadu and Rajasthan.

10.    Finance Minister Proposes liberalization of American Depository Receipt (ADR)/Global Depository Receipt (GDR) regime.

11.    Special small saving scheme to be introduced for the education of girl child.

12.    Concessional rate of tax on dividend from foreign subsidiaries continues.

13.    No sunset date for concessional rates for foreign dividends.

14.    Concessional rate of 5% on interest extended to all types of bonds.

15.    Government shall consider public comments received on DTC.

16.  10 year tax holiday for power companies starting production and distribution on or before March 31, 2017.

17.    To boost manufacturing sectors - customs duty reduced on certain inputs such as  fatty acids, etc.

18.    Import duty on steel increased from 5% to 7.5%.

19.    Government to provide investment allowance at 15% for 3 years to manufacturing  company investing more than Rs. 25 crores.

20.    Portfolio income of Foreign Institutional Investor (FIIs) to be treated as capital gain.

21.    Imported electronics goods to cost more. A cess to be introduced.

22.    Income of funds from portfolio investments shall be deemed as capital gains.

23.    Controversy over categorization of income of foreign investor funds as capital gains or business income shall end with this proposal.

24.    Customs duty reduced on certain types of coals.

25.    Government reduces basic customs duty on LCD/LED televisions.

26.    Customs duty cut to nil on import of LCD, LED Panels below 19 inch.

27.    TV sets, Solar power units, computers, oil products, soaps becomes cheaper.

28.    Footwear to go cheaper - excise duty reduced from 12% to 6%.

29.    Sugary carbonated drinks to get dearer.

30.    Cigarettes, Cigars, Pan Masala, Gutka and other tobacco product to attract more excise duty. FM has increased the specific excise duty on cigarettes in the range of 11 percent to 72 percent and excise duty on gutka to 70 percent from 60 percent.

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