Highlights of today’s Budget presented at the Parliament for the FY 2014-15 (July 10, 2014)

Highlights of today’s Budget presented at the Parliament for the FY 2014-15

Income Tax:

Individuals:

1.     Income tax exemption limit raised to Rs 2.5 lakh from Rs 2 lakh at present

2.    Tax exemption increased to Rs 3 lakh for senior citizens, from Rs 2.5 lakh

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

4.    Section 80C limit raised to Rs 1.5 lakh from Rs 1 lakh

Tax treatment for Pension Funds and Mutual funds linked retirement plans to be made uniform

Indirect Taxes:

a.    Computers are likely to cost more: Additional duty on imported computer components

b.  Customs Duty:

i.      TVs to get cheaper: Customs duty cut to nil on import of LCD, LED Panels below 19 inch, colour picture tubes exempted from basic customs duty

ii.    Coal customs duty changed to reduce disputes regarding quality of coal

c.   Excise Duty:

i.      Increase in excise duty

-              On cigarettes, pan masala, gutka, tobacco products.  (to 70% from 60%)

-              Sugary carbonated drinks to get dearer

ii.    Decrease in excise duty

-              On footwear, packaged food (to 6% from 12%)

d.    Service Tax: Minimal changes. Negative list: Sales of space for advertisements on online. Newspapers will remain exempted. 

‘Indian Customs Single Window Project’ mooted to facilitate trade.FDI

FDI: 

Insurance Sector: Increases FDI to 49% from 26 % currently
FDI in defense raised to 49%

Others:

-  Provides 10 year tax holiday for new power generators or power distributors.

-  Provides investment alloance at 15% for 3 years to the manufacturing company which invests more than Rs. 25 Crs in plant and machinery.

-  Extends the facility for long term foreign currency borrowings at a concessional rate of 5% to all bonds (from only infra bonds earlier) and also for a period upto 30.06.2017

-  Income out of portfolio also to be capital gains

- Range concept being introduced for calculating "arms lenght price" for Transfer         Pricing.

-  SEZs to be revived

-  MSME definition to be revisited with a view to enhance the capital ceiling

-  National Industrial Corridor Authority to be set up

-  E- Visa facility to be introduced for select countries in select airports. 

Note: The law on retrospective tax stays.

Sanka Indrani, Company Secretary

Achuthan R, Company Secretary