NEW DELHI, July 10 � The Budget for 2014-15 today doled out sops to income tax payers 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 seeking to revive growth, manufacturing and investor confidence, reports PTI.
Without tinkering with the tax rates, Finance Minister Arun Jaitley in his maiden Budget, provided encouraging signals for domestic and foreign investors, offering not to �ordinarily� bring about any tax change retrospectively which creates a fresh liability.
In a bid to encourage savings, the Budget raised the deduction limit on interest on housing loan for self-occupied property from Rs 1.5 lakh to Rs 2 lakh and raised the exemption limit in the case of senior citizens from Rs 2.5 lakh to Rs 3 lakh.
However, there is no change in the rate of surcharge either for the corporates or individuals and the education cess of three per cent will also continue.
Baggage allowance for passengers returning from abroad has been raised from Rs 35,000 to Rs 45,000.
The Budget makes cigarettes, tobacco, pan masala, gutka and cold drinks costlier by raising excise duties, while CRT TVs used by the poor, LCD and LED TV panels of less than 19 inches will be cheaper through cuts in customs duties.
Direct tax proposals in the Budget involve a sacrifice of Rs 22,200 crore, while indirect tax proposals will yield a revenue of Rs 7,525 crore.
Assuaging sentiments of foreign investors deterred by the change brought in 2012, 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.
In post-Budget comments, the Minister said there will be no fresh liability, but also ruled out refunding taxes collected over the last 30 or 40 years. He also said the government will revive the revised Direct Taxes Code (DTC) taking into account the comments of stakeholders.
The Service Tax net has been widened by inclusion of radio-cabs and online ads to mop up additional revenue by pruning the negative list.
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 Budget raises defence spending by 12.5 per cent 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.
The total expenditure estimates stand at Rs 17,94,892 crore. Gross tax receipts will be Rs 13,64,524 crore, of which Centre�s share will Rs 9,77,258 crore. Non-tax revenues for current financial year will be Rs 2,12,505 crore and capital receipts other than borrowings will be Rs 73,952 crore.
The Budget pegs the fiscal deficit for the current fiscal at 4.1 per cent of the GDP and 3.6 and 3 per cent 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 per cent growth in the economy has resulted in challenging situation.
He said 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.