The Budget for 2014-15 today left income tax rates unchanged but provided sops to small and marginal assessees by raising the threshold exemption limit from Rs 2 lakh to Rs 2.5 lakh and investments under 80C by Rs 50,000 to Rs 1.5 lakh while promising not to bring tax changes with retrospective effect.
However, given the extreme hype generated by the govt as well as the media, the Budget failed to deliver on any big ticket issue.
“While the Budget is low on big-bang announcements, it is highly focused on smoothening out the operational irritants that impede business decision making. The Budget aims at creating a business friendly environment and sending a strong signal that the government is focused on fiscal discipline," Amit Rathi, MD, Anand Rathi Financial Services Ltd.
Presenting the maiden budget of the BJP-led NDA government, Finance Minister Arun 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.
"Considering the inflationary trends in the economy, a substantial increase in the Income tax slab was expected. However, there is only a marginal relief of INR 5,000 (excluding surcharge and Cess) in the Union Budget 2014, leading to a disappointment to the individual tax payers. This relief of INR 5000 is without considering the impact of the increased deduction under Section 80C of the Income tax Act. Although, the Government seems to be focused on providing incentives for women, no special tax relief has been granted to the working women," says Divya Baweja, Partner, Deloitte Haskins & Sells LLP.
The 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.
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.