Presenting the maiden budget of the BJP-led NDA government, Jaitley raised the deduction limit on interest on housing loan for self-occupied property from Rs 1.5 lakh to Rs 2 lakh and free-baggage allowance for inbound passengers from Rs 35,000 to Rs 45,000.

Tax exemption limit raised to Rs 2.5 lakh

The salaried class has got something to cheer with the Finance Minister raising tax exemption limit to Rs 2.5 lakh from Rs 2 lakh, providing a relief of Rs 50,000.
"I propose not to make any changes in the tax rate. However, with the view to provide relief to small and marginal and senior citizen, I propose to increase the personal income tax exemption limit by Rs 50,000 from Rs 2 lakh to Rs 2.50 lakh in case of all individual tax payers, who are below the ago of 60 years," he said.    

The proposal, according to an estimate, is likely to be benefit about two crore tax payers.
Similarly, he raised tax exemption limit from Rs 2.5 lakh to Rs 3 lakh in the case of senior citizens.
"I do not propose to make any change in the rate of surcharge for either for corporates or individual. The education cess for all tax payers shall continue at 3 percent," he said.
Thus, tax on income from Rs 2.5 lakh to Rs 5 lakh is retained at 10 percent, up to Rs 10 lakh at 20 percent and above 10 lakh at 30 percent.
Noting that households are main contributors to savings, he said the investment limit under 80 C has been raised to Rs 1.5 lakh from the existing Rs 1 lakh to encourage savings.
Investment in Public Provident Fund up to Rs 1.5 lakh would now be exempt from tax. This was earlier pegged at Rs 1 lakh.
He also raised tax deduction limit on account of interest of housing loan in case of self occupied property to Rs 2 lakh from Rs 1.5 lakh.

To enhance the functioning of income tax department as facilitators, 60 more Ayaykar Seva Kendras will be opened to promote excellence in service delivery.

In direct taxes, the Budget makes no changes in the rate of surcharge for any class of tax payer while continuing the education cess at 3 percent for all.

Tax exemption limit raised to Rs 2.5 lakh
INCOME (Individual Tax Payers) TAX RATE IMPACT
Up to Rs 2,50,000                  
Rs 5,000 (savings)
Rs 2,50,001 to Rs 5,00,000 10 percent -DO-
Rs 5,00,001 to Rs 10,00,000 20 percent -DO-
Above Rs 10,00,000 30 percent -DO-
INCOME (For Senior Citizens - above 60 Yrs) TAX RATE IMPACT
Up to Rs 3,00,000  
NIL Rs 5,000 (savings)
Rs 3,00,001 to Rs 5,00,000 10 percent -DO-
Rs 5,00,001 to Rs 10,00,000 20 percent -DO-
Above Rs 10,00,000 30 percent -DO-

Cheaper Vs Dearer

The Union Budget makes cigarettes, tobacco, pan-masala, gutka and cold-drinks costlier by raising excise duties while CRT TVs used by poor, LCD and LED TV panels of less than 19-inches will be cheaper through cuts in customs duties.

Colour TVs, LED, LCD TVs below 19 inches Tobacco products
Computer Peripherals Bauxite
Footwear Aerated drinks containing added sugar
Machinery and equipment of food processing and packaging
Soft drinks
Mobile phones Some telecom products
Oil and Soap items Ready made Clothes
Solar Lamp, LED Lights, fixtures and lamps Radio Taxi
Smart cards Portable X-ray machines
Colour picture tubes Half cut/broken diamonds
Precious & semi-precious colour stones & diamond

Imported electronic products

Flat copper wires
Branded petrol
Life micro insurance policies
HIV/AIDS drugs and diagnostic kits
DDT insecticides
E-book readers
 Machinery and equipment of solar energy powers
RO based water purifiers
Machinery and equipment of compressed biogas plants
Sports Gloves

Plan spending up 26.9 percent at Rs 5.75 lakh crore

The government also proposed an increase in the Plan expenditure or spending on social sector schemes to Rs 5,75,000 crore for the current fiscal, a 26.9 percent higher over the actual spent in the previous fiscal.
The Plan expenditure is the government spending on social sector schemes such as Bharat Nirman, rural employment guarantee scheme and National Rural Health Mission. Besides, it includes Centre's assistance to various states and Union Territories Plans.
"In 2013-14, plan funds to the tune of Rs 4,53,085 crore could be utilised. Plan allocation of Rs 5,75,000 crore in the main Budget 2014-15 marks an increase of 26.9 percent over actual (spending) for 2013-14," the Finance Minister said.
The previous government had cut the total Plan spending to Rs 4,75,532 crore (revised estimates) for 2013-14 compared to the budget estimates of the Rs 5,55,532 crore, for keeping a tab on the fiscal deficit. This was second year in a row when the UPA government cut Plan spending substantially to keep fiscal deficit under control.
He said, "While preparing estimates of plan expenditure, attention was paid to the absorptive capacity of the department and on achieving greater outcome with the same financial outlay."
According to the Minister, the plan spending has been targeted towards agriculture, capacity creation in health and education, rural roads and national highways infrastructure, railways network expansion, clean energy initiatives, development of water resources and river conservation plans.

The Minister also said that thorough convergence of programmes or social sector schemes, greater impact from the money spent will be achieved.

The budget estimate for non-Plan expenditure for this fiscal is Rs 12,19,892 crore compared to revised estimates of Rs 11,14,902 crore for 2013-14. Last year, the government had made provision of Rs 11,09,975 crore for non-Plan expenditure for 2013-14 in the budget.
The non-Plan expenditure which is recurring in nature includes salaries, payment of interest, defence spending etc.     

"While preparing Non-Plan estimates, due care has been taken to fully provide for all the essential activities.

Additional amounts have been provided for fertiliser subsidy and capital expenditure of Armed Forces," Jaitley said.
The total budgeted expenditure estimates including Plan and Non-Plan stand at Rs 17,94,892 crore which are higher than revised estimates for 2013-14 at Rs 15,90,434 crore. Last year, the government made a provision of Rs 16,65,297 crore for total expenditure in the budget.

The government will constitute an Expenditure Management Commission to look into every aspect of expenditure reform. It will overhaul the subsidy regime while providing full protection to the marginalised.

Initiatives to attract investors

In encouraging signals to domestic and foreign investors, Jaitley announced that all fresh cases arising out of retrospective amendments of 2012 in respect of indirect transfers will be scrutinised by a high-level committee to be constituted by the CBDT before any action is initiated.
"I hope the investor community both within India and abroad will repose confidence on our stated position and participate in the Indian growth story with renewed vigour," he said, offering a stable and predictable tax regime.
He also said the government will revive the revised Direct Taxes Code (DTC) taking into account the comments of stakeholders.
The Finance Minister said government will promote FDI by raising the cap to 49 per cent in Defence and Insurance with full Indian management and control.
The direct tax proposals involve a sacrifice of Rs 22,200 crore while indirect tax proposal will yield a revenue of Rs 7,725 crore.

Budget for Defence

In defence allocation, Rs 1000 crore has been set apart for implementing one-rank-one-pension policy. Capital outlay for defence has been raised by Rs 5,000 crore over the amount provided in the interim budget.
The Finance Minister also announced setting up a war memorial, war museum and a national police memorial. For modernisation of state police forces, Rs 3,000 crore has been allocated.

The Union Budget raises defence spending by 12.5 percent to Rs 2.29 lakh crore. Non-plan expenditure for the current year has been estimated at Rs 12,19,892 crore with additional amount for fertiliser subsidy and capital expenditure for armed forces.

Fiscal Deficit

The Union Budget pegs the fiscal deficit for the current fiscal at 4.1 percent of the GDP and 3.6 and 3 percent in 2015-16 and 2016-17 respectively.
In an apparent reference to the previous government, Jaitley said slow decision making had resulted in a loss of opportunity and two years of sub-5 percent growth in the economy has resulted in challenging situation.
He said the government intends to usher in a policy regime that would bring the desired growth, lower inflation, sustained level of external sector balance and prudent policy stance.
The Finance Minister said the present situation presents a challenge of slow growth in manufacturing sector, in infrastructure and also the need to introduce fiscal prudence.
The tax to GDP ratio must be improved and non-tax revenue increased, he said while pruning the negative list for levy of service tax.

Jaitley said the government would like to introduce the Goods and Services Tax (GST) to streamline tax administration, avoid harassment of business and ensure higher revenue collection.
The Union Budget proposes to infuse Rs 2.40 lakh crore in PSU banks in which citizens will be allowed direct shareholding.

The Union Budget sets a target of Rs 8 lakh crore for agriculture credit during the current year and will continue the interest subvention scheme and raise the corpus of rural infrastructure development fund (RIDF) to Rs 25,000 crore.


IT exemption limit for those below 60 raised from Rs.2 lakh to Rs.2.5 lakh; from Rs.2.5 lakh to Rs.3 lakh for senior citizens
Investment limit under Section 80C of the Income Tax Act raised 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.
No change in surcharge for corporates; education cess to continue
Excise duty on cigarettes raised from 11 percent to 72 percent
Allocation of Rs.150 crore to improve safety of women in larger cities
Allocation of Rs.100 crore for "Beti bachao, beti padhao" (Protect the girl child, educate the girl child) programme
Allocation of Rs.500 to support Kashmiri Immigrants for rebuilding their lives
Total sanitation in every household by 2019
Colour TVs to cost less on reduced customs duties
Free baggage allowance raised from Rs.35,000 to Rs.45,000
Excise duty on footwear halved
Total expenditure in 2014-15 estimated at Rs.17,97,892 crore; plan expenditure estimated at Rs.12,19,892 crore
Budget will lay down steps aimed at 7-8 percent growth in next few years; aim is "Sub ke saath, sub ka vikas" (With everyone, For everyone's development)
Government committed to achieve fiscal deficit of 4.1 percent in 2014-15, 3 percent by 2015-16 and 2 percent by 2016-17
Defence allocated Rs.229,000 crore; modernisation gets Rs.5,000 crore over and above interim budget
FDI in defence sector raised to 49 percent from 26 percent
Allocation of Rs.1,000 crore for implementing One Rank One Pension scheme
War Memorial and War Museum to be established at Princess Park in New Delhi; Rs.1,000 crore allocated
Allocation of Rs.50 crore for National Police Memorial
Allocation of Rs.2.037 crore for creating integrated Ganga conservation mission
Jal Marg Vikas programme to be launched to promote navigation on Ganga from Allahabad to Haldia
Ghat development at Kedarnath, Haridwar, Kanpur, Varanasi, Allahabad, Patna and Delhi gets Rs.100 crore
Hastkala Academy to be set up with allocation of Rs.30 crore
Six more textile clusters to be set up with allocation of Rs.200 crore
Allocation of Rs.200 crore for power reforms and Rs.500 crore for water reforms to make Delhi a truly world-class city
E-visas to be introduced at nine airports
Five new tourist circuits to be established; Rs.500 crore to be allocated for this
World class convention centre to come up in Goa
National sports academies to be set up for disciplines like shooting, wrestling and boxing
Jammu and Kashmir gets Rs 200 crore to upgrade sports facilities
Sports university to come up in Manipur
Negative list for service tax reduced
Thirteen more airports to get 24x7 customs facilities
Excise duty to be cut to revive manufacturing
Revenue loss of Rs.22,000 crore due to direct tax proposals
Government committed to implement GST at the earliest; issues raised by states to be resolved
Gas pipeline grid of 15,000 km needs to be doubled
Six debt recovery tribunals to be set up
Bharat Depository Receipt to be created
Uniform KYC norms to be introduced across entire financial sector


Steps to revive SEZs
Sixteen new port projects to be taken up this fiscal
Development of industrial corridors with emphasis on smart cities linked to transport connectivity
Skill India to be launched to train the youth with emphasis on employability and entrepreneur skills
Target of constructing 8,500 km of national highways in current fiscal
Second Green Revolution to be launched with focus on protein revolution
Sustainable growth of 4 percent in agriculture to be achieved
Price Stabilisation Fund of Rs.500 Crore for mitigating risk of price volatility in agricultural produce
Corpus of Rs.5,000 crore for long-term loans to farmers
Kisan TV to be launched to disseminate information in real time
Allocation of Rs 14,389 crore for rural roads
Allocation of Rs 500 crore to provide 24x7 power in rural areas
Allocation of Rs 8,000 crore to improve rural housing
Allocation of Rs 100 crore for soil testing facilities
Allocation of Rs 50 crore for breeding of indigenous cattle
Allocation of Rs 500 crore to improve broadband connectivity in rural areas
New scheme to provide assured irrigation
Export promotion mission to be established to bring all stakeholders under one umbrella
FDI limit in insurance sector raised to 49 percent
Allocation of Rs.500 crore for 5 more IITs and 5 more IIMs
All states to get AIIMS like institutions
Allocation of Rs.100 crore to promote good governance
Allocation of Rs.3,600 crore for drinking water schemes
Allocation of Rs.4,000 crore for National Housing Bank
To print currency notes with Braille signs
Shares of PSU banks to be sold to retail investors
CBDT to scrutinize all cases under 2012 law on retrospective tax cases
Problem of black money to be fully addressed
Expenditure Management Commission to be established this fiscal


Highlights for Women Safety:

•    Beti Bachao, Beti Padhao Yojana' - 100 crores
•    Outlay of Rs. 50 crores for a pilot scheme on road safety
•    Another 150 crores to be spent by MHA on safety for women in larger cities
•    8000 crores for national housing banking programme - for rural housing

Women Safety and Girl Child

Taking into account the apathy towards the girl child, Government today introduced a new scheme called "Beti Bachao, Beti Padhao" and allocated Rs 100 crore for this in the union budget.
Jaitley said that it is a "shame that while the country has emerged as a major player amongst the emerging market economies, the apathy towards girl child is still quite rampant in many parts of the country".
The scheme, he said, will help in generating awareness and improve the efficiency of delivery of welfare services meant for women.
"Government would focus on campaigns to sensitize people of this country towards the concerns of the girl child and women", he said.
The process of sensitization must begin early and therefore the school curriculum must have a separate chapter on gender mainstreaming," Jaitley said..
At a time when the country is confronted with women safety issues, government proposed Rs 150 crore to be spent by Ministry of Home Affairs on a scheme to increase the safety of women in large cities.
The budget also proposed that the Ministry of Road Transport and Highways will spend Rs 50 crore on pilot testing a scheme for safety of women on Public Road Transport.
Further, government proposed setting up "Crisis Management Centres" in all the districts of Delhi this year in all government and private hospitals, funding for which will be provided from the Nirbhaya Fund, the Minister added.

Highlights for Education:

•    5 more IITs and IIMs  to be set up - Rs. 500 crores allocated
•    All 6 additional AIIMS have become operational
•    FTII Pune, SRFTI Kolkata will be accorded the status of institute of national importance
•    Pandit Madan Mohan Malviya New Teacher's Training Programme launched
•    100 Crores for modernising Madrasas
•    Plan to set up 4 more AIIMS in Andhra Pradesh, West Bengal, Vidharbha and Purvanchal. Rs. 500 crore allocated

Highlights for Agriculture:

•    100-crore Agri-Infrastructure fund
•    Urgent need for investment in agro-technology and development.
•    Horticulture University in Telangana and Haryana

The government also announced a new 24-hour TV channel dedicated to agriculture sector with an outlay of Rs 100 crore for providing real-time information to farmers.
Jaitley said that a sum of Rs 100 crore has been set aside for Kisan (Farmers) Television to provide real time information on various farming and agriculture issues.
Earlier this month, Information and Broadcasting minister Prakash Javadekar had told PTI a channel will be named 'DD Kisan' will come very soon and Prasar Bharati is already working on finalising the plans for launching the channel at the earliest.
The BJP had before the 2014 General Elections declared that if voted to power, it would "explore setting up of regional Kisan TV channels."
Earlier, Prasar Bharati had been deliberating whether a single agriculture channel would suffice considering the different languages and requirements in various states and regions of the country.
Doordarshan and the All India Radio already have been running programmes related to agriculture and farming.
The Prasar Bharati Act lays down that the public broadcaster should pay special attention to fields of agriculture and rural development along with areas like education and spread of literacy, environment, health and family welfare and science and technology.

Food Security

Towards Food Security, the government commits itself to restructuring Food Corp of India (FCI), reducing transportation and distribution losses and efficacy of PDS.
Wheat and rice will be provided at reasonable prices to weaker sections.

Development Projects

As a measure of encouraging infrastructure and construction sectors to revive growth and provide jobs, the Budget provides tax incentives for real estate investment trust and infrastructure investment trust.
In manufacturing, considering the need to incentivize smaller entrepreneurs, it provides investment allowance at the rate of 15 per cent to a manufacturing company that invests more than Rs 25 crore in a year in plant and machinery for three years.

Jaitley also proposed to extend the investment linked deduction to new sectors namely slurry pipelines for transportation of iron ore.
The concessional tax rate of 15 percent on dividends received by Indian companies from foreign subsidiaries is being continued because it has resulted in enhanced repatriation of funds. There is no sunset date to ensure stability of policy.

Power Sector

Taking note of the fact that power supply continues to a major area of concern in the country, the Budget proposes to extend the 10-year tax holiday to undertakings which begin generation, transmission and distribution by March 31, 2017, instead of annual extensions.


In a big relief to the capital-starved private insurance sector, the Finance Minister proposed raising the Foreign Direct Investment (FDI) cap from 26 percent to 49 percent.
"The insurance sector is investment starved. Several segments of insurance sector need expansion. The composite cap of the insurance sector is proposed to be increased to 49 percent from the current level of 26 per cent with full management and control through the FIPB route," he said.
The move would help insurance firms to get much needed capital from overseas partners.

A National Savings Certificate with insurance cover will also be launched to provide additional benefits for small savers. In the PPF scheme, annual ceiling will be enhanced to Rs 1.5 lakh per annum from Rs 1 lakh at present.

Save Ganga

An integrated Ganga conservation mission, called 'Namami Gange' is proposed to be set up with an outlay of Rs 2,037 crore for this year.
An NRI fund for Ganga will be set up which will finance special projects. Rs 100 crore have been set aside for ghat development and beautification of river front at Kedarnath, Varnasi, Haridwar, Kanpur, Allahabad, Patna and Delhi.
A 1,620-km Ganga inland waterway development from Haridwar to Haldia is planned to be completed in 6 years at a cost of Rs 4,200 crore, Jaitley said.


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