Budget for Financial Year 2014-15 was presented by Finance Minister Sh. Arun Jaitley on 10th July 2014.
Summary of Direct Tax Related Proposals : Net Effect of the direct tax proposals is revenue loss of Rs.22,200 crore
- Government will not ordinarily bring about any change retrospectively which creates a fresh liability
- Constituting additional benches for Advance Rulings
- No Changes in the tax rate, rate of surcharge either for the corporates or the individuals, HUFs, firms etc. The education cess for all taxpayers shall continue at 3 percent
- Propose to increase 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 who are below the age of 60 years. Similarly, propose to raise the exemption limit from Rs.2.5 lakh to Rs.3 lakh in the case of senior citizens
- Propose to increase the investment limit under section 80C of the Income-tax Act from Rs.1 lakh to Rs.1.5 lakh
- Propose to increase the deduction limit on account of interest on loan in respect of self occupied house property from Rs.1.5 lakh to Rs.2 lakh
- Conducive tax regime for Infrastructure Investment Trusts and Real Estate Investment Trusts to be set up in accordance with regulations of the Securities and Exchange Board of India.
- Mutual Funds, other than equity oriented funds, the capital gains arising on transfer of units held for more than a year is taxed at a concessional rate of 10% whereas direct investments in banks and other debt instruments attract a higher rate of tax, he proposed to increase the rate of tax on long term capital gains from 10 percent to 20 percent on transfer of units of such funds. I also propose to increase the period of holding in respect of such units from 12 months to 36 months for this purpose.
- where an assessee fails to deduct and pay tax on specified payments to residents, 100 percent of such payments are not allowed as deduction while computing his income. This has caused undue hardship to taxpayers, particularly where the rate of tax is only 1 to 10%. Hence, He Propose to provide that instead of 100 percent, only 30% of such payments will be disallowed.
- Propose to extend facility of Aykar SevaKendras (ASK) by opening 60 more such SevaKendras during the current financial year to promote excellence in service delivery
- An incentive in the form of investment allowance to a manufacturing company that invests more than Rs.100 crore in plant and machinery during the period from 01.04.2013 to 31.03.2015 was announced. Considering the need to incentivize smaller entrepreneurs, I propose to provide 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. This benefit will be available for three years i.e. for investments upto 31.03.2017. The Scheme announced last year will continue to operate in parallel till 31.03.2015.
- Investment linked deduction to two new sectors, namely, slurry pipelines for the transportation of iron ore, and semi-conductor wafer fabrication manufacturing units. This will boost investment in these two critical sectors
- Extension of the 10 year tax holiday to the undertakings which begin generation, distribution and transmission of power by 31.03.2017
- Foreign Portfolio Investors (FPIs) have invested more than Rs.8 lakh crore (about 130 billion US $) in India, propose to provide that income arising to foreign portfolio investors from transaction in securities will be treated as capital gains
- The concessional rate of tax at 15 percent on dividends received by Indian companies from their foreign subsidiaries has resulted in enhanced repatriation of funds from abroad
- Propose to extend the eligible date of borrowing in foreign currency from 30.06.2016 to 30.06.2017 for a concessional tax rate of 5 percent on interest payments