Union Budget Highlights 2014-15 – In simple terms

Budget of 2014-15 highlights

Union Budget Highlights 2014-15 – In simple terms

You would have got bored from budget announcements in Televisions and newspapers, hence I am not going to get bored by going into much details. I would provide Union Budget Highlights of 2014-15 in simple terms.

Union Budget 2014-15 – Highlights – Personal Finance

  • Maximum IT exemption limit raised to Rs. 2.5 lacs for an individual.
  • Uniform Know Your Customer (KYC) norms for the entire financial sector.
  • Public Provident Fund (PPF) annual ceiling enhanced to 1.5 lacs.
  • Senior Citizen are not liable to pay tax on income upto Rs. 3,00,000.
  • Investment limit under Section 80C increased to Rs. 1.5 Lacs.
  • Deduction for Interest on Housing Loan increased to Rs. 2,00,000.
  • Finance Minister proposes one Demat account for all financial products.
  • Special small saving scheme to be introduced for the education of girl child.
  • Income of funds from portfolio investments shall be deemed as capital gains.
  • Controversy over categorization of income of foreign investor funds as capital gains or business income shall end with this proposal.
  • Finance Minister Proposes liberalization of American Depository Receipt (ADR)/Global Depository Receipt (GDR) regime.

Other Budget Highlights

  • Taxation issues for foreign funds with Indian managers to be clarified.
  • The government will not bring any retrospective amendment, which is unfair to the taxpayers.
  • Five more Indian Institute of Management (IIMs) to be set up.
  • Four more Indian Institute of Technology (IITs) to be set up.
  • Rs. 100 crores for Metro in Lucknow and Ahmedabad.
  • Allocates Rs. 400 crores to incentivize the development of low cost housing.
  • Rs 500 crores for solar power development project in Tamil Nadu and Rajasthan.
  • Accounting Standards for Banks and Insurance sector would be notified separately.
  • No change in tax rates for corporate tax payers.
  • Concessional rate of tax on dividend from foreign subsidiaries continues.
  • No sunset date for concessional rates for foreign dividends.
  • Concessional rate of 5% on interest extended to all types of bonds.
  • Government shall consider public comments received on DTC.
  • 10 year tax holiday for power companies starting production and distribution on or before March 31, 2017.
  • To boost manufacturing sectors – customs duty reduced on certain inputs such as fatty acids, etc.
  • Import duty on steel increased from 5% to 7.5%.
  • Government to provide investment allowance at 15% for 3 years to manufacturing company investing more than Rs. 25 crores.
  • Portfolio income of Foreign Institutional Investor (FIIs) to be treated as capital gain.
  • Imported electronics goods to cost more. A cess to be introduced.
  • Customs duty reduced on certain types of coals.
  • Government reduces basic customs duty on LCD/LED televisions.
  • Customs duty cut to nil on import of LCD, LED Panels below 19 inch.
  • TV sets, Solar power units, computers, oil products, soaps becomes cheaper.
  • Footwear to go cheaper – excise duty reduced from 12% to 6%.
  • Sugary carbonated drinks to get dearer.
  • Cigarettes, Cigars, Pan Masala, Gutka and other tobacco product to attract more excise duty.
  • Basic rates of customs duty @ 10%, excise duty @ 12% and service tax @ 12% remains intact.
  • Excise duty hiked on aerated waters with sugar content.

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Union Budget Highlights 2014-15

Suresh KP


  1. Hi Suresh,

    Is there any timelines for the budget to be approved by parliament?

    Will these investment changes will be applicable from the date budget approved or From 1st April 2014?

  2. hi sir,

    Kindly advise if i can invest lump sum amount in MIP of mutual funds(growth) or balanced funds, I am looking for some higher returns at low risk..Liquid funds and ultra short term funds are providing similar returns to bank FD…Please suggest good funds to invest lumpsum amount at low medium risk.



    1. Akhil, As markets have reached peak, investing lump sum in mutual funds would be risky. Instead, invest in bank FD and start investing regulary in mutual funds. This way, you can take care of stock market fluctuations. Since debt funds are taxable as short term investments for a period of 3 years, you should stay away from such funds for now.

    1. There is lot of uncertainity now after budget announcements. Lot of requests are going from AMFI to Central Govt. We should wait before taking any call.

  3. Thanks for nice articles Suresh
    I have invested one lakh in ppf for the past three years in my name.can I invest another 150000 in my wife’s name?She is a home maker.also can I increase my investment in ppf to 150000? Pls advise. At the end of 15 years from now, I would make 9000000

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