Budget 2014-15 Highlights regarding Income Tax , Tax Slab , Tax Saving , Exemptions etc.
DIRECT TAXES PROPOSALS
>> Personal Income-tax exemption limit raised by Rs. 50,000/- that is, from Rs. 2 lakh to Rs. 2.5 lakh in the case of individual taxpayers, below the age of 60 years. Exemption limit raised from Rs. 2.5 lakh to Rs. 3 lakh in the case of senior citizens.
>> No change in the rate of surcharge either for the corporates 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 Rs. 1 lakh to Rs. 1.5 lakh.
>> Deduction limit on account of interest on loan in respect of self occupied house property raised from Rs..1.5 lakh to Rs. 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 Rs. 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 Rs. 22,200 crore.
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