Proposed major changes to tax laws in budget 2014

Today on 10th July 2014, union budget has been introduced in parliament by our finance minister Mr. Arun jaitely.

Below in this article we have highlighted major changes that are proposed in this budget in income tax, services and other indirect tax laws.

Budget 2014

Highlights of major changes in Income tax

Basic exemption limit below which individuals are not liable to pay tax has been increased by Rs. 50000.

Due to this change normal basic exemption limit for those who are below 60 years of age are increased from the previous limit of Rs. 200000 to Rs. 250000.

Similarly for senior citizen of 60 years age and below 80 years of age, the earlier basic exemption limit of Rs. 250000 has been increased to Rs.300000 i.e. the person who is between 60 years and 79 years will enjoy the basic exemption limit of Rs.300000.

Basic exemption limit of Rs. 500000 remain unchanged for a person of 80 years or above i.e. supper senior citizen.

Limit of deduction available under section 80C has been increased from Rs.100000 to Rs. 150000. By which, now an individual can claim more tax deduction from income by investing in life insurance, PPF and in other eligible investments.

The maximum investment limit in PPF account has been increase from earlier limit of Rs. 100000 to Rs.150000. With this amendment, here onwards you can invest more in PPF scheme to get tax deduction and higher return at a high interest rate.

Income tax rates, surcharge and education cess that use to be charged earlier remains same and no changes are proposed in this union budget.

Earlier deduction limit of Rs.150000 for interest on housing loan (self occupied) has been increased to Rs. 200000.

10 years tax holiday for companies that starts power generation by March 31, 2017.

Highlight of major changed to indirect tax

CRT TV is exempted from custom duty

Basic custom duty on 19 inch LCD and LED has been reduced to zero from the earlier limit of 10%.

Basic custom duty is also reduced for items used in chemical and petrochemical sector to encourage investment.

Excise duty on foods processing and packaging machinery for fruits and vegetables reduced to 6% from the earlier rate of 10%.

Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.