Indian Budget 2014–Impact

Today was a big day for India and the new government. The Union Budget 2014 was presented to the citizens of India with quite a few changes by Hon’ble Finance Minister. Here is a quick look at some of the major one’s.

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Tax Slabs: The Basic exception limit has been increased to 2.5 lakhs and to 3 lakhs for senior citizens.

Other highlights of the Budget:

  • Section 80C investment limit is increased to Rs. 1.5 lakh
  • Maximum annual contribution to PPF is increased to Rs. 1.5 lakh
  • Exemption on interest paid on Housing Loan for self-occupied house increased to Rs. 2 lakh
  • EPFO to launch “Uniform Account Number” service for contributing members to ease portability.
  • Introduction of uniform KYC norms & inter-usability of KYC records across entire financial sector.
  • Proposal to introduce single DEMAT account for all types of financial transactions.
  • Kisan Vikas Patra (KVP) to be reintroduced.
  • A special small savings instrument to cater to requirements of education & marriage of the girl child to be introduced.
  • A National Savings Certificate (NSC) with insurance cover to provide additional benefits to the small saver.
  • Income arising to foreign portfolio investors from transaction in securities to be treated as Capital Gains.
  • To remove tax arbitrage, rate of tax on long-term capital gains increased from 10% to 20% on transfer of units of Mutual funds, other than equity oriented funds and tenure increased from 12 to 36 months.

There are few things, which will cost us more:

  • Tobacco Products
  • Aerated Soft Drinks (with Sugar content)
  • Imported Electronic Equipment (Gadgets)
  • Steel

And more important for us are the one’s which will cost us less:

  • LCD’s & LED’s (below 19 inches)
  • Footwear’s
  • Plastics Products
  • Diamond Jewellery & Precious Stones

Along with these, there were other things which got a mention in the Budget:

  • Direct Tax Code (DTC) to be reviewed.
  • Introduction of GST to be given thrust.
  • FDI in insurance increased to 49% to increase in Insurance penetration.
  • Convergence with IFRS by Adoption of the New Indian Accounting Standards by Indian Companies.
  • To revamp Indian Depository Receipt (IDR) & introduce Bharat Depository Receipt (BDR)
  • Government to print currency notes with Braille like signs for visibly challenged persons.

Did the budget 2014 miss any important one’s? Do let us know what you felt about the budget. Happy reading and sharing.

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