india budget july 2014

posted 10 Jul 2014, 00:49 by Unknown user

TAXATION

* Aims to approve goods and services tax by end of this year

* Will not change rules on retrospective tax. All pending cases of retrospective tax for indirect transfers to be examined by a high-level committee before action is taken

* Proposes changes in transfer pricing mechanism

* Extends 5 percent withholding tax on corporate bonds until June 30 2017

* Will provide the necessary tax changes to introduce real estate investment trusts and infrastructure investment trusts



FM proposes cut in basic customs duty on some petrochemical units

To expand horizon of service tax

Basic custom duty on LCD, LEDs below 19 inches reduced to nil from 10%

Excise duty on cigarettes doubled to 22%

To cut excise duty on packaging machinery to 6%

To cut excise duty on food processing to 6% from 10%

Interest cap on Self-occupied houses raised to Rs 2 lakh from Rs 1 lakh

Income tax exemption limit for senior citizens raised to Rs 3 lakh frm Rs 2.5 lakh 

Announces increased excise duty on tobacco products, and aerated water products with added sugar

Announces reduction in excise duty for specified food package industry from 10% to 6%.


New tax slabs:

Upto 2.5 lakh - NIL;

Above 2.5-5 lakh - 10%;

Rs 5-10 lakh - 20%;

Above Rs 10 lakh - 30% ;

SrCitizen: Above 60(Upto 3lakh)/Above 80(Upto Rs 5 lakh)-NIL


Basic customs duty on colour picture tubes scrapped

To hike tax rates to 20% for transfer of MF units

Impact: Duty reduced in petrochemcial products, likely to impact Reliance's margins from this business

Impact: Fatty acid and glycerine duty reduced -- to benefit soap manufacturers


Propose to introduce range concept in transfer pricing

Impact: Capital goods sector can benefit from investment allowance of 15% for 3 yrs to manufacturing company which invest more than Rs 25 crore in plant and machinery 

Tax announcements by FM
  • No change in direct tax rates
  • To increase personal I-T limit to Rs 2.5 lk
  • Raises tax exemption limit to Rs 3lk vs Rs 2.5lk for senior citizens
  • No change in tax laws for Hindu Undivided Families
  • Education cess to continue at 3%
  • To raise Housing interest deduction limit to Rs 2 lk
  • Raises 80C investment cap to Rs 1.5 lk
  • To raise investment allowance for investments above Rs 25 cr in units
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