Personal Tax Exemption Limit Raised by Rs. 50,000/- ; No Change in the
Rate of Surcharge; 15% Investment Allowance to Manufacturing Companies,
to Incentivize Small Entrepreneurs and Income from Foreign Portfolio
Investors to be Treated as Capital Gains.
The General Budget 2014-15 presented by the Union Finance
Minister Shri Arun Jaitley 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 budget proposes
to continue education cess at 3 percent.
Investment limit under section 80C of the Income-tax Act has also been
raised from Rs. 1 lakh to Rs. 1.5 lakh and Deduction limit on account of
interest on loan in respect of self occupied house property raised
from Rs.1.5 lakh to Rs.2 lakh. To incentivize 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. The benefit to be available for three years i.e. for
investments upto31.03.2017. Investment allowance to manufacturing
company investing more than Rs.100 crore announced last year to continue
in parallel till 31.03.2015.
To bring greater certainty and to encourage fund manager to shift to
India, income arising to foreign portfolio investors from transaction in
securities will be treated as capital gains. Concessional rate of 15
percent on foreign dividends without any sunset date will be continued.
To augment low cost long term foreign borrowings for Indian companies,
the eligible date of borrowing in foreign currency has been extended
from 31.03.2015 to 31.03.2017 for a concessional tax rate of 5 percent
on interest payments. Tax incentive extended to all types of bonds
instead of only infrastructure bonds.
The budget proposes introduction of a “Roll Back” provision in the
Advanced Pricing Agreement (APA) scheme so that an APA entered into for
future transactions is also applicable to international transactions
undertaken in previous four years in specified circumstances.To remove
tax arbitrage, rate of tax on long term capital gains has been increased
from 10 percent to 20 percent on transfer of units of Mutual funds,
other than equity oriented funds.
60 more Ayakar Seva Kendras will be opened during the current financial
year to promote excellence in service delivery. Net effect of the direct
tax proposals will result in revenue loss of Rs.22,200 crore.