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HIGHLIGHTS OF THE UNION BUDGET 2014-15

Article By: stara
Personal finance


HIGHLIGHTS OF THE UNION BUDGET 2014-15 PRESENTED BY THE FINANCE MINISTER


Submitted:Jul 10, 2014    Reads: 56    Comments: 0    Likes: 0   


HIGHLIGHTS OF THE UNION BUDGET 2014-15

THE FOLLOWING ARE THE SALIENT HIGHLIGHTS OF THE MAIDEN BUDGET OF THE MODI GOVERNMENT PRESENTED BY THE HON. FINANCE MINISTER, MR. ARUN JAITLEY AT 11.00 A.M.

UNPRECEDENTED IN HISTORY WAS THE FIVE MINUTE BREAK REQUESTED BY THE FINANCE MINISTER AT11.45 AND HE BE ALLOWED TO SIT AND DELIVER HIS BUDGET SPEECH THEREAFTER.

THE FINANCE MINISTER MENTIONED THAT SLOW DECISION MAKING HAS EFFECTED GROWTH AND A BEGINNING OF A JOURNEY OF 7-8% GROWTH PROJECTED IN THE COMING YEARS. HE ALSO EMPHASISED THE GROWTH IN THE MANUFACTURING SECTOR.

GENERAL PROVISIONS:

  1. ADVANCE RULING FACILITY EXTENDED TO RESIDENT TAX PAYERS ALSO WITHIN DEFINED THRESHOLD LIMIT HITHERTO AVAILABLE ONLY TO NRIs AND PSUs
  2. GOVERNMENT WILL NOT CHANGE POLICIES RETROSPECTIVELY WHICH WILL INDUCE LIABILITY ON THE TAX PAYER. I.E. NO NEW RESTROSPECTIVE TAX LAWS WILL BE INTRODUCED. HOWEVER, NO CLARITY ON THE PENDING LITIGATIONS ON EARLIER INTRODUCED RESTROSPECTIVE LAWS.
  3. ALL RETRO TAX CASES TO BE SCRUTINISED BY A HIGH LEVEL COMMITTEE OF THE CBDT.
  4. FDI IN DEFENCE SECTOR INCREASED TO 49%
  5. CAP ON FDI IN INSURANCE SECTOR INCREASED FROM 26% TO 49%.
  6. FY16 FISCAL DEFICIT TARGETED AT 3.6% OF THE GDP.
  7. FY17 FISCAL DEFICIT TARGETED AT 3% OF THE GDP.
  8. INR 7060 CRORES ALLOCATED FOR HOUSING SECTOR.
  9. E-VISAS TO BE INTRODUCED IN 9 AIRPORTS IN A PHASED MANNER WITHIN A YEAR.
  10. GOVERNMENT TO SELL SHARES IN BANKS TO RETAIL INVESTORS.
  11. KISAN VIKAS PATRAS (KVPs) - A SMALL SAVING SCHEME TO BE REINTRODUCED AGAIN.
  12. CURRENCY NOTES IN BRAILLE TO BE ITRODUCED FOR THE VISUALLY IMPAIRED.
  13. INR 1000 CRORES ALLOCATION FOR PRIME MINISTER KRISHI SICHAYI YOJANA
  14. UNDER THE SANITATION PROGRAMME, SWACHH BHARAT ABHIYAN, ALL HOUSES TO BE PROVIDED SANITATION BY 2014
  15. A NATIONAL MULTISCALE PROGRAMME CALLED SKILL INDIA TO BE INITIATED TO GENERATE EMPLOYMENT.
  16. SEVEN NEW INDUSTRIAL SMART CITIES TO BE ALLOCATED.
  17. INR 7060 CRORES ALLOCATION TO START 100 SMART CITIES.
  18. IN R500 CRORES ALLOCATED FOR RURAL ELECTRIFICATION SCHEME. COMMITTED TO 24/7 POWER SUPLY FOR ALL VILLAGES.
  19. INR 5000 CRORES ALLOCATION FOR SC/ST SCHEMES
  20. INR 200 CRORES ALLOCATED FOR SARDAR PATEL STATUE OF UNITY.
  21. INR 100 CRORES ALLOCATED FOR EMPOWERMENT OF GIRL CHILD, UNDER THE BETI PADAO-BETI BADHAO SCHEME.
  22. UNIFIED ACCOUNT SCHEME FOR PROTABILITY OF PROVIDENT FUND SCHEMES.
  23. NO CUT IN NREGA ALLOCATION.
  24. TWELVE MORE MEDICAL COLLEGES TO BE ADDED.
  25. INR 500 CRORES ALLOCATION FOR 4 MOR AIIMS LIKE INSTITUTES TO BE SET UP.
  26. INR 500 CRORES ALLOCATED FOR 5 MORE IITs AND IIMs TO BE SET UP.
  27. INR 3600 CRORES ALLOCATED FOR DRINKING WATER SCHEMES.
  28. INR 100 CRORES ALLOCATED FOR METRO FEASIBILITY STUDY FOR LUCKNOW AND AHMEDABAD.
  29. INR 4000 CRORES ALLCOATED FOR NATIONAL HOUSING BANKS FOR PROVIDING AFFORDABLE HOUSING TO THE URBAN POOR INCLUDING EASIER FDI IN THE SECTOR.
  30. INR 15 CRORES FOR SAFETY OF WOMEN ON ROADS UNDER THE NIRBHAYA SCHEME.
  31. INR 100 CRORES ALLOCATED FOR A NEW GIRL CHILD FUND TO BE FORMED.
  32. INR 100 CRORES ALLOCATED FOR DEVELOPMENT OF MADRASAS UNDER THE MINORITY SCHEME.
  33. THE SENIOR CITIZEN PENSION PLAN EXTENDED TILL AUGUST 2015.
  34. SLUM DEVELOPMENT TO BE INCLUDED IN CSR ACTIVITIES.
  35. INR 100 CRORES FOR NATIONAL ADAPTATION FUND FOR CLIMATE CHANGE
  36. FARMERS WILL GET ADDITIONAL 3% REBATE FOR TIMELY REPAYMENT OF THE LOANS APART FROM THE 7% ROI IN THE FORM OF INTEREST SUBVENTION ON THESE LOANS WHICH IS NOW EXTENDED TO FY 2014-15.
  37. INR 100 CRORES ALLOCATED FOR AGRI INFRASTRUCTURE FUND.
  38. INR 14389 CRORES ALLOCATED FOR RURAL ROADS.
  39. INR 100 CRORES ALLOCATED FOR RURAL ENTREPREUNERSHIP PROGRAMME.
  40. INR 500 CRORES ALLOCATED FOR FARM WAREHOUSING PLAN.
  41. STATE GOVERNMENTS TO BE ENCOURATED TO SET UP FARMERS MARKET.
  42. INR 8 LAKH CRORES ALOOCATD FOR FARM CREDIT IN FY 16.
  43. STEPS TO BE INITIATED TO REVIVE SEZs.
  44. MUMBAI INFRASTRUCTURE CORRIDOR TO BE COMPLETED ON SCHEDULE.
  45. INR 200 CRORES FOR SIX MORE TEXTILE CLUSTERS.
  46. INR 50 CRORES ALLOCATED FOR THE PASHMINA DEVELOPMENT PROGRAMME.
  47. INR 10000 CRORES ALLOCATION FOR START-UP FUNDS.
  48. IN R11635 CRORRES ALLOCATION FOR DEVELOPMENT OF PORTS IN FY 15.
  49. ULTRA MODER POWER PROJECTS TO BE INITIATED IN THE STATES OF TAMIL NADU, RAJASTHAN AND LADAKH.
  50. A NEW INDIAN ACCOUNTING STANDARDS FOR THE FINANCIAL SECTOR TO BE MADE VOLUNTARILY APLICABLE FROM FY 15-16 AND MANDATORILY FROM FY 16-17.
  51. INR 3000 CRORES ALLOCATED FOR ROADS IN THE NORTH EAST.
  52. THE GAS GRID PIPELINE TO BE DOUBLED TO 30000 KM THROUGH THE PPP MODE.
  53. TO CLARIFY ON TAX TREATMENT FOR FOREIGN FUNDS IN INDIA.
  54. TO INTRODUCE A SINGLE DMAT ACCOUNT FOR ALL FINANCIAL TRANSACTIONS.
  55. THE CEILING FOR INVESTMENT IN PF INCREASED FROM INR 1 LAKH TO INR 1.50 LAKHS.
  56. ADR, GDR SCHEMES TO BE LIBERALISED.
  57. SIX DEBT RECOVERY TRIBUNALS TO BE SET UP.
  58. PENDING INSURANCE BILL TO BE TAKEN UP.
  59. WAR MEMORIAL AND WAR MUSEUM TO BE SET UP AT PRINCESS PART AND INR 100 CRORES ALLOCATED FOR THE SAME.
  60. INR 2.29 LAKH CRORES ALLOCATION FOR THE DEFENCE SECTOR.
  61. BANKS CAN NOW GIVE LONG TERM LOANS FOR INFRASTRUCTURE PROJECTS.
  62. INR 50 CRORES ALLOCATION FOR NATIONAL POLICE MEMORIAL.
  63. INR 2037 CRORES ALLOCATED FOR THE GANGA MISSION.
  64. INR 500 CRORES ALLOCATED FOR 5 TOURIST CIRCLES.
  65. INR 3000 CRORES ALLOCATED FOR STATE POLICE MODERNISATION.
  66. INR 990 CRORES ALLOCATION FOR DEVELOPMENT OF BORDER VILLAGES.
  67. INR 100 CRORES ALLOCATED FOR RIVER INTERLINKING PROJECTS.
  68. Agriculture university to be set up in Telangana and Haryana; Rs 100 crore have been allocated for this purpose
  69. Will initiate scheme to provide a soil health card, Rs 100 crore set aside. Rs 56 crore for soil testing labs across country
  70. INR 5000 crore to address the need for scientific warehousing
  71. Provision have been made by various ministries and departments to help in the development of Andhra Pradesh and Telangana
  72. All the Govt departments and ministries will be integrated through E-platform by Dec 31 this year
  73. Rs 100 crore for cleaner thermal power technology
  74. Rs 200 crore set aside for upgradation of indoor, outdoor stadiums in Jammu and Kashmir to international standards,
  75. A SPORTS UNIVERSITY TO BE SET UP IN MANIPUR.
  76. NATIONAL SPORTS ACADEMY TO BE SETUP IN DIFFERENT CITIES.
  77. THE BUDGET ESTIMATES FOR FY 2014-15 IS AS FOLLOWS:

NON PLAN EXPENDITURE: INR 12,19,892 CRORES

PLAN EXPENDITURE: INR 5,75,000 CRORES

TOTAL BUDGET EXPENDITURE: INR 17,94,892 CRORES

GROSS TAX RECEIPTS: INR 2,12,505 CRORES

STATE SHARE OF ABOVE: INR 3,87,266 CRORES

CENTRAL SHARE OF TAX RECEIPTS: INR 9,77,258 CRORES

NON TAX RECEIPTS: INR 2,12,505 CRORES

CAPITAL RECEIPTS: INR 73,952 CRORES

TOTAL RECEIPTS: INR 12,63,715 CRORES

DEFICIT: INR 5,31,177 CRORES

FISCAL DEFICIT: 5.67% OF GDP

REVENUE DEFICIT: 2.90% OF GDP

DIRECT TAX PROPOSALS (INCOME TAX):

  1. NO CHANGE IN TAX RATES
  2. BASIC EXEMPTION LIMIT INCREASED FROM INR 2 LAKHS TO INR 2.50 LAKHS
  3. BASIC EXEMPTION LIMIT FOR SENIOR CITIZENS INCREASED FROM INR 2.50 LAKHS TO INR 3 LAKHS.
  4. NO CHANGE IN SURCHARGE
  5. EDUCATION CESS WILL CONTINUE AT 3%.
  6. THE INVESTMENT LIMIT U/S 80C INSRASED FROM INR 1 LAKH TO INR 1.50 LAKHS
  7. THE DEDUCTION FOR INTEREST ON HOUSING LOAN INCREASED FROM INR 1.50 LAKHS TO INR 2 LAKHS.
  8. THE INTRODUCTION OF THE ABOVE BENEFITS WILL RESULT IN A MAXIMUM TAX SAVINGS OF INR 15,450/- FOR AN INDIVIDUAL TAX PAYER.
  9. CAPITAL GAINS TAX RATE INCREASED TO 20% FOR INVESTMENT IN MUTUAL FUNDS.
  10. HOLDING PERIOD FOR COMPUTING CAPITAL GAINS TAX ON SALE OF MF UNITS INCREASED FROM 12 MONTHS TO 36 MONTHS.
  11. TEN YEAR TAX HOLIDAY IN POWER SECTOR TO CONTINUE.
  12. IF PAYMENTS ARE MADE WITHOUT DEDUCTION OF TAX AT SOURCE, 30% OF SUCH PAYMENTS WOULD BE DISALLOWED INSTEAD OF THE HITHERTO 100%.
  13. SIXTY MORE AAYAKAR SAMPARK KENDRAS (ASKs) TO BE SET UP ACROSS THE COUNTRY IN FY 15.
  14. GOVERNMENT TO REVIEW THE DIRECT TAX CODE.
  15. INCOME FROM PORTFOLIO INCESTMENTS TO BE CAPITAL GAINS.
  16. TEN YEAR TAX HOLIDAY EXTENDED TO UNITS WHICH BEGIN GENERATION, DISTRIBUTION AND TRANSMISSWION OF POWER BY 31.03.2017.
  17. CONCESSIONAL RATE OF 15% ON FOREIGN DIVIDENDS WITHOUT ANY SUNSET DATE TO CONTINUE.
  18. INVESTMENT ALLOWANCE OF 15% FOR MANUFACTURING COMPANY WHICH INVESTS MORE THAN INR 25 CRORES IN NEW PLANT AND MACHINERY, BENEFIT TO BE AVAILABLE FOR THREE YEARS UPTO 31.03.2017.
  19. INVESTMENT LINKED DEDUCTION EXTENDED TO TWO MORE SECTORS.
  20. Asset fund managers encouraged to set up shop in India, income to be treated as capital gains
  21. Income Tax Dept is expected to function not only as an enforcement dept but also as a facilitator
  22. THE DIRECT TAX PROPOSALS TO RESULT IN A NET REVENUE LOSS OF INR 22,200 CRORES.

CUSTOMS DUTY PROPOSALS:

  1. CUSTOMS DUTY CUTS ON PETROCHEMICALS
  2. 3% CESS ON IMPORTED ELECTRONIC EQUIPMENTS
  3. 100% CUSTOMS DUTY ON TELECOM PRODUCTS.
  4. NO CUSTOMS DUTY ON LED PANELS BELOW 19 INCHES.
  5. EXPORT DUTY ON BAUXITE INCREASED FROM 10% TO 20%
  6. IMPORT DUTY INCREASED ON COLAS AND NON ALCOHOLIC BEVERAGES.
  7. THE EXPORT DUTY ON METHYL ALCOHOL REDUCED TO 5%.

EXCISE DUTY PROPOSALS:

  1. the excise duty on packaging materials reduced from 10% to 6%
  2. the excise duty on food processing machinery reduced from 10% to 6%
  3. excise duty on footwear halved from 12% to 6%.
  4. the excise duty on tobacco products and cigarettes increased from 11% to 72%.
  5. aerated drinks and pan masal to cost more.

service tax proposals:

  1. no change in basic service tax rates.
  2. negative list items to be reduced.
  3. service tax levied on radio taxies, brought in par with rent-a-car operators.
  4. the loading/unloading/transportation of cotton exempted.
  5. services of esic from 1.4.2012 exempted.
  6. the services of micro insurance schemes where sum assured does not exced inr 50,000 exempted.
  7. the indirect tax proposals expected to bring in additional revenue of inr 7,525 crores.

WITH WARM REGARDS,

CA. SANJAY THAMPY

FCA, Grad. CWA, CS, DBM





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