Budget 2014/15 - Highlights

DIRECT TAXES PROPOSALS :

• Personal Income-tax exemption limit raised by 50,000/- that is, from  2 lakh to 2.5 lakh in the case of individual taxpayers, below the age of 60 years. 
• Exemption limit raised from 2.5 lakh to 3 lakh in the case of senior citizens.
• No change in the rate of surcharge either for the corporate or the individuals, HUFs, firms etc.
• The education cess to continue at 3 percent.
• Investment limit under section 80C of the Income-tax Act raised from 1 lakh to 1.5 lakh.
• Deduction limit on account of interest on loan in respect of self occupied house property raised from  1.5 lakh to  2 lakh.
• Conducive tax regime to Infrastructure Investment Trusts and Real Estate Investment
• Trusts to be set up in accordance with regulations of the Securities and Exchange Board of India.
• Investment allowance at the rate of 15 percent to a manufacturing company that invests more than 25 crore in any year in new plant and machinery. The benefit to be available for three years i.e. for investments upto 31.03.2017.
• Investment linked deduction extended to two new sectors, namely, slurry pipelines for the transportation of iron ore, and semi-conductor wafer fabrication manufacturing units.
• 10 year tax holiday extended to the undertakings which begin generation, distribution and transmission of power by 31.03.2017.
• ‰Income arising to foreign portfolio investors from transaction in securities to be treated as capital gains.18
• ‰Concessional rate of 15 percent on foreign dividends without any sunset date to be continued.
• The eligible date of borrowing in foreign currency extended from 30.06.2015 to 30.06.2017 for a concessional tax rate of 5 percent on interest payments. Tax incentive extended to all types of bonds instead of only infrastructure bonds.
• 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.
• Introduction of range concept for determination of arm’s length price in transfer pricing regulations.
• ‰To allow use of multiple year data for comparability analysis under transfer pricing regulations.
• To remove tax arbitrage, rate of tax on long term capital gains increased from 10 percent to 20 percent on transfer of units of Mutual Funds, other than equity oriented funds.
• Income and dividend distribution tax to be levied on gross amount instead of amount paid net of taxes.
• In case of non deduction of tax on payments, 30% of such payments will be disallowed instead of 100 percent.
• Government to review the DTC in its present shape and take a view in the whole matter.‰ 
• 60 more Ayakar Seva Kendras to be opened during the current financial year to promote excellence in service delivery.
• ‰Net Effect of the direct tax proposals to result in revenue loss of 22,200 crore

Foreign Direct Investment (FDI)

• Government to promote FDI selectively in sectors.
• The composite cap of foreign investment to be raised to 49 per cent with full Indian management and control through the FIPB route.
• The composite cap in the insurance sector to be increased up to 49 per cent from 26 per cent with full Indian management and control through the FIPB route.
• Requirement of the built up area and capital conditions for FDI to be reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively for development of smart cities.
• The manufacturing units to be allowed to sell its products through retail including Ecommerce platforms.

Smart Cities

• A sum of  7060 crore is provided in the current fiscal for the project of developing “one hundred Smart Cities"

Health and Family Welfare

• Free Drug Service and Free Diagnosis Service to achieve “ Health For All”
• Two National Institutes of Ageing to be set up at AIIMS, New Delhi and Madras Medical College, Chennai.
• A national level research and referral Institute for higher dental studies to be set up.
• AIIMS like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in UP. A provision of 500 crores made.
• 12 new government medical colleges to be set up.
• States’ Drug Regulatory and Food Regulatory Systems to be strengthened by creating new drug testing laboratories and strengthening the 31 existing State laboratories.
• 15 Model Rural Health Research Centres to be set up for research on local health issues concerning rural population.
• A national programme in Mission Mode to halt the deteriorating malnutrition situation in India to be put in place within six months.

Information Technology

• Pan India programme “Digital India” to with an outlay of ` 500 crore to be launched.
• Programme for promoting “Good Governance” to be launched .A sum of ` 100 crore provided.

Information and Broadcasting

• 100 crore allocated for 600 new and existing Community Radio Stations.
• Film & Television Institute, Pune and Satyajit Ray Film & Television Institute, Kolkata are proposed to be accorded status of Institutes of national importance and a “National Centre for Excellence in Animation, Gaming and Special Effects to be set up.
• 100 crore is provided for Kisan TV, to disseminate real time information to the
• farmers on issues such as new farming techniques, water conservation, organic farming etc.

Higher Education

• Jai Prakash Narayan National Centre for Excellence in Humanities to be set up in MP.
• 500 crore provided for setting up 5 more IITs in the Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
• 5 IIMs in the States of HP, Punjab, Bihar, Odisha and Rajasthan.
• Simplification of norms to facilitate education loans for higher studies