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2014 Indian Budget Highlights- Income Tax Changes And Announcements

Here are all the important 2014 Indian budget highlights including income tax changes, direct and indirect tax announcements and other economic decisions announced by Finance Minister Arun Jaitley on 10th July 2014. We have included all important topics including Direct taxes like Income Tax, social and infrastructure projects, FDI, Banking reforms, defense and education budget, minorities, education, rural and urban schemes for development of India under the new NDA government for their fiscal year plan for 2014-15. Total expected expenditure is 17,94,892 Crore Rupees.

2014 India Budget Highlights

Most important announcements on various subjects are as below:

Direct Taxes (Income TAX), Tax Saving Plans & Insurance Sector

  • Relief to individual tax payers
  • No change in tax rate
  • Personal Income Tax Rebate Increased to Rs. 2.5 Lakhs for all tax payers under age of 60
  • Personal Income Tax Rebate Increased to Rs. 3.0 Lakhs for Senior Citizens
  • Investment Limit under section 80 C increased to Rs. 1.5 Lakhs from Rs. 1 Lakh
  • Increased limit on deduction of interest on home load increased to Rs. 2 Lakh from 1.5 Lakhs
  • DTC – Direct Tax Code will be considered for implementation in subsequent years

Indirect Taxes & Industry Taxes (Service Tax, VAT, Excise Duty And Others)

  • Easy and quick settlement of pending tax cases and defaults
  • Rationalized tax structure
  • Investment Allowance of 15% for investment of above Rs. 25 Crore
  • 10 Years tax holiday for power generation and distribution companies for encouraging more power generation and supply
  • Continue the tax rates of 15% for foreign investors
  • Tax incentives on Infrastructure bonds
  • Transfer pricing provisions to be revived
  • Relief for divined tax deduction
  • Custom Duties- Reduced custom duty on fatty acids and food oils from 5% to NIL
    • Battery from 10% to 5%
    • Coal Tar 10% to 5%
    • Ethanol and other similar chemicals reduced by 2.5 %
    • Additional duty of 4% on computer hardware
    • Except of PVC import
    • CRT picture tube duty removed
    • Below 19 inch TV Panels duty made from 10% to NIL
    • Imported Flat roll steel from 5% to 7.5%
    • Except imports for parts used for manufacturing & setting up solar energy panels to panels
    • Wind power generation parts duty reduced
    • Lower duty of 5% on parts for bio-gas plants
  • Coal Custom Duty On rationalized for all types of coal at 2.5 % duty and 2% VENT
  • Import Duty on coal increased to 5% from 0
  • Iron import duty increased
  • Semi-processed diamonds & finished diamonds rationalized at 2.5%
  •  Export duty on Bauxite from increased
    • Concession on Excise Duty concession to remain
    • Reduction on packaged food decreased from 10 to 6%
    • Footwear duty deceased
    • EVA sheets for solar power exempted from excise duty
    • Machinery and parts for solar power equipment exempted from excise
    • Parts for wind power production excepted from excise duty
    • Increase in excise on Cigarette, Cigars, Pan Masala, Tobacco & Gutka
    • Additional duty on aerated drinks with added sugar – Soft drinks prices will increase
    • Clean Energy Encouraged
    • Negative list has been reviewed
    • Ship Industry service tax will be reviewed
    • Tourism services for foreign tourists will be exempted
    • Service tax on transportation of warehouses for farming exempted
    • Micro-insurance schemes for sum insured under Rs.  50,000 will be expempted
    • Waste disposal services exempted

General  Announcements

  • No legal approvals required for e-commerce operations, this is a big relief for e-commerce
  • E-Visa will be provided for people travelling to India at 9 Airports via Electronic Travel Authorization
  • National Multi-Skill Program “Skill India” to be launched for vocational skill development like welding, carpenting
  • Assured Irrigations project “PM Krishi Sichnahi Yojna” with Rs. 1,000 Cr. Investment
  • Sanitation project- Toilets in all homes by 2019 by “Swach Barat Abhiyaan”
  • PPP (Public Private Partnetship) Projects will be encouraged
  • 24 Hours Power Supply facility by Rs. 500 Crore spend
  • Faster clearing of import goods with more sea and air-port facilities of Customs which will work 24×7
  • Single Point Customs clearing
  • Extra clearing on imports to be conducted only online via all agencies involved for clearance
  • Amendments to Customs and Excise proposed

Banking Sector

  • 2,40,000 Crore Investment in Banking sector by 2018

Foreign Direct Investment (FDI)

  • Encouragement to FDI in various sectors

Infrastructure Projects

  • Infrastructure investment trust to boost real estate segment

Defense & Police Forces Budget

  • 100 Cr. rupees allocated for modernization of defense
  • 300 Cr. rupees allocated for state police development
  • 990 Cr. rupees allocated of police along border
  • 50 Cr. rupees allocated for creating National Police Memorial

Education Projects

  • New TB institutes at AIIMS Delhi and Madras will be opened
  • 4 new AIIMS planned- under consideration- Rs. 500 Crore allocated for the same
  • AIIMS to be created in rest of the states which do not have such institutions
  • 15 Rural health research lab facilities to be set up
  • Rs. 20635 Cr. for developing toilets and drinking water facilities in govt. girls school
  • Online courses to be added to govt. school
  • 5 More IITs to be setup & 5 More IIMs to be setup – Rs. 500 Cr. allocated
  • Bio-Tech research institutes will be encouraged

Social Projects

  • Special projects for SC & ST
  • Welfare of Senior Citizens Pension Scheme Revived From Aug 15, 2014 to Aug 14, 2015
  • PPF money which is unclaimed will be used for welfare of senior citizens
  • EPFO Portability of PF Account to be supported
  • Special schemes for empowerment of Disabled
  • Center for Disability Sports
  • Special assistance to establish facilities for visually impaired
  • New currency notes to have brail imprints
  • Women Safety to be ensured in Public transport, Hospitals
  • Beti Bachcao Yojna to encourage education of girl child- Rs. 100 Cr. allocated
  • Rs. 14389 Cr. Allocated for Rural Road Development projects
  • MANREGA scope to be increased by including micro-finance, start-up village and entrepreneurship projects
  • Rural Housing Scheme- Rs. 8000 Cr. Allocated to support rural housing
  • Backward Grant for development of backward areas to be boosted
  • Rs.3600 Cr. for providing clean drinking water to rural areas
  • Digital India Program- Broadband at rural areas- Sum of Rs. 500 Cr. allocated
  • Rs. 100 Cr. for improving governance
  • Rs. 100 Cr. for 600 new community radio stations
  • Urban Renewal- Recycle water, better Internet, better municipal facilities will be provided- Rs. 5000 Cr. allocated
  • Urban Renewal- Safe drinking water, waste disposal, new Metro projects to be promoted
  • Rs. 100 Cr. for Metro in Lucknow
  • Housing for all by 2022- Rs. 4,000 Cr. allocated National housing bank scheme for low cost housing
  • Slum development under CSR for corporate to encourage slum development
  • Special schemes to fight Malnutrition
  • Minorities education and ancestral skill development to be encouraged
  • Farming education institutes to be set up in Assam and Jharkhand by Rs. 100 Cr. allocation
  • Agricultural and Horticultural Universities to be setup
  • NABARD- Direct financing to Farmers announced
  • Price stabilization mechanism to be set up for farmers
  • Farming markets for direct selling of products by farmers
  • Rs. 8 Lakh Cr. for farming credit for this fiscal
  • Special loan rates for farmer at 7% with 3% rebate on timely payment
  • Increasing warehouse infrastructure capacity for farming products- Rs. 5000 Cr. allocated
  • Long term rural credit fund announced- 5000 Cr. rupees allocated
  • 5000 Cr. rupees allocated- SC RC fund for farming
  • 2200 Cr. rupees allocated for produces development fund for farming
  • Efficiency of transport of farming products will be improved
  • Kissan Television to be launched- Real Time Info for farmers on farming techniques- 100 Cr. rupees allocated
  • E-Biz platform to be development with integrated payment gateway- All govt. agencies will be attached to it
  • 100 Cr. rupees allocated for industrial  corridor connectivity
  • New industrial clusters to be developed around the  industrial  corridors
  • Export Promotion projects to be encouraged
  • Enhance trading facilities in India
  • SMEs will be encouraged
  • Special financing of SMEs by SC & ST- Committee created
  • Entrepreneurship & Start up- 10000 Cr. rupees allocated for financing these companies
  • Definition of SMEs to be revised
  • Nationwide incubation program for Entrepreneurship
  • Special encouragement to handlooms industry- 200 Cr. rupees allocated
  • Hastkala Academeny in PPP mode- 30 Cr. rupees allocated
  • Pashmina Production project- 50 Cr. rupees allocated for J&K
  • 3P India for PPP dispute resolution- 500 Cr. rupees allocated
  • New harbor projects for developing shipping industry
  • Inland Navigation Development- inland waterways development on river Ganga- 4200 Cr. rupees allocated
  • New Airport development scheme under PPP
  • NHAI development of highways 37830 Cr. rupees allocated
  • New thermal power projects
  • New coal projects for power projects
  • Optimization of coal transport
  • New solar projects- 500 Cr. rupees allocated
  • 100 Cr. rupees allocated for green energy projects
  • Renewal energy will encouraged
  • Oil and petroleum- PNG will be encouraged
  • Additional 15000 KM of pipelines will be developed under PPP model
  • Mining- Investment will be encouraged
  • Mining will be encouraged keeping environment in consideration
  • Rate of royalty on minerals will be revised for better returns to state governments
  • Financial Sector- Modern monetary framework will be developed by RBI
  • Central KYC for benefit of users
  • Single demat account for all transactions will be introduced
  • New Indian Account Standards mandatory from FY 15-16, optional for FY 14-15
  • Banking for all house holds- new mission started, two account in each household
  • Special banks to be developed for small industries, rural households to be developed
  • Insurance- new law amendment will be considered
  • Small Saving Schemes- NSS for education and marriage of girl child
  • PPF- Limit increased to 1.5 Lakhs from 1 Lakh rupees
  • One Rank One Salary Scheme to be implemented
  • National Mission on Pilgrimage development 100 Cr. rupees allocated
  • Heritage development at Mathura, Amritsar, Ajmer etc. 200 Cr. rupees allocated
  • Archaeological Science development 100 Cr. rupees allocated
  • Goa convention facility to be developed under PPP
  • Water resources for river to be used more efficiently- 100 Cr. rupees allocated set aside for study of the same
  • 2027 Cr. rupees allocated- Namami Ganga, Integrated Ganga cleaning scheme announced
  • 100 Cr. rupees allocated for Ghat development across Ganga in multiple states
  • NRI Fund for Ganga will be developed
  • Sports- National Sports Academy in multiple states will be developed
  • 200 Cr. rupees allocated for developing sports stadiums in J&K
  • 100 Cr. rupees allocated for developing sports in Manipur
  • Employment Exchange will also do career counselling- 100 Cr. rupees allocated
  • Young leader program with 1000 Cr. rupees allocated
  • Displaced Kashmiri Migrant Rehabilitation- 500 Cr. rupees allocated
  • National center for Himalyan Studies with 100 Cr. rupees allocated
  • Organic farming to be encouraged in North Eastern states, 100 Cr. rupees allocated
  • Development of rail system for North East parts of India 1000 Cr. rupees allocated over and above rail budget
  • 24×7 TV Channel for North East to be launched
  • Andhra And Telangana will be given special attention for development
  • Special project for developing water facilities in Delhi NCR
  • 150 Cr. rupees allocated for development of Andaman & Nicobar

Home Loans

  • Increased limit on deduction of interest on home load increased to Rs. 2 Lakh from 1.5 Lakhs
  • Rural Housing Scheme- Rs. 8000 Cr. Allocated to support rural housing
  • Housing for all by 2022- Rs. 4,000 Cr. allocated National housing bank scheme for low cost housing

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