Union Budget 2014-15: How will it affect you?
Last Updated: Monday, July 14, 2014, 09:48
Reema Sharma/Ajeet Kumar
The hullabaloo about the much-awaited Union Budget 2014-15 is over! Though the FM tried to give relief to the individual taxpayers in what his party described a ''growth-oriented budget'', he however stopped short of addressing the concerns regarding other sectors, which were eagerly expecting some relief.
"I propose not to make any changes in the tax rate. However, with the view to provide relief to small and marginal and senior citizen, I propose to increase the personal income tax exemption limit by Rs 50,000 from Rs 2 lakh to Rs 2.50 lakh in case of all individual tax payer who are below the ago of 60 years," the FM said while presenting budget for 2014-15 in Parliament.
The following is the list of most important announcements made by the Finance Minister.
Raising Income tax exemption limit
Though the slab of tax free income has not moved up in line with real inflation, FM's announcement on taxation has brought some sort of relief to the individual tax payers as it will increase the purchasing power of individuals and stimulate demand.
The General Budget 2014-15 presented by the Union Finance Minister has raised the personal income-tax exemption limit by Rs 50,000/- that is, from Rs 2 lakh to Rs 2.5 lakh in the case of individual taxpayers, below the age of 60 years.
Exemption limit raised from Rs 2.5 lakh to Rs 3 lakh in the case of senior citizens. However there is no change in the rate of surcharge either for the corporates or the individuals, HUFs, firms etc.
The only dampener here is that the FM has nothing for women taxpayers in his kitty.
Raising tax exemption under 80C
Investment limit under Section 80C of the Income-Tax Act has also been raised from Rs 1 lakh to Rs 1.5 lakh which will encourage savings to some extent.
Public Provident Fund (PPF)
In further relief to the depositors, the Finance Minister has raised Public Provident Fund (PPF) deposit limit to Rs 1.5 lakh per annum. This was earlier pegged at Rs 1 lakh.
Hiking the cap on interest on home loan
The realty sector, which has been under pressure for quite some time, has now been given a breather by the Finance Minister. To incentivise investments into the sector, the deduction limit on account of interest on loan in respect of self occupied house property has been raised from Rs 1.5 lakh to Rs 2 lakh.
To encourage small entrepreneurs, an Investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs 25 crore in any year in new plant and machinery has been announced.
The benefit will be available for three years i.e. for investments upto 31.03.2017. Investment allowance to manufacturing company investing more than Rs.100 crore announced last year will continue till 31.03.2015.
Women and senior citizens
It was widely expected that Arun Jaitley will give more relief to women tax payers. On the contrary, the Finance Minister's budget announcement had nothing specific for women. Earlier, women earning upto Rs 2 lakhs were exempted from paying tax. There was widespread expectation that the limit would be hiked by a minimum of Rs 50,000 over and above the general category exemption limit. The individual tax exemption limit of Rs 2.5 lakh has no gender segregation.
However, senior citizens will have a sigh of relief. As of now, senior citizens earning upto Rs 2,50,000 did not come under the tax bracket. Income tax exemption limit for senior citizen has now been raised to Rs 3 lakh.
Retail Investors: Rajiv Gandhi Equity Savings Scheme
The government has not made any changes in the Rajiv Gandhi Equity Savings Scheme (RGESS) nor has it brought more such equity saving schemes in its Budget. However the first time investors can be assured that they will continue to get tax benefits. Under section 80CCG the first time investors within Rs 12 lakh income group can spend upto Rs 50,000 in the scheme. They can also claim tax benefit under this for a period of three years.
Another very important section that was eagerly expecting some sops from the Finance Minister was housewives. Arun Jaitley's major announcements on dearer and cheaper is bound to have a direct impact on the Indian housewives that have been toiling to their kitchen budget in control.
For long, housewives have been economising on their kitchen expenses, owing to exorbitant prices of essential items, but the NDA government's announcement on packaged/processed food products and edible oil will surely give some respite to them.
First Published: Thursday, July 10, 2014, 15:48