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. Dear Mr. Suresh,

    What will be your suggestions now in the light of new Union Budget – specially TOP 10 MFs.

    Eager to know from you.

    Thanks & Regards,

    Anand Sagar


    1. Anand, Top mutual funds would not change. However you can invest in Infra and Banking as they would benefit more. Please check my article on coming monday, where I have given some tips

  2. Dear Mr.Suresh

    Thanks for the Budget highlights 2014.  Can you pl. throw some light on the Long term Capital Gain Tax on debt Mutual fund from 10% to 20%.  Pl. advise does this apply to only Debt funds or includes even Equity.  What would be the impact on retail investors on a long and short term.  What is your take on Long & Short term investment and which is better.  Rgds D RAGHAVAN 


  3. Thanks for the list. One more question …

    Income of funds from portfolio investments shall be deemed as capital gains.

    Can you explain…

    One more thing …

    • Dividend distribution tax is now proposed to be calculated on the gross
    amount of distributable income and not on the dividend received by the
    investor, reducing the sum received by individuals.

  4. Hi, Suresh

    I didn't understood the point deduction of interest on housing loan, increased fron 1.5 lakh to 2 lakh, what exactly is it for tax payers. Can please explain in detail. Thanks in advance.


  5. Hi Suresh,
    Really thanx for noting the budget in simple points n sharing to us.One thing i would like to ask that what you think about this budget? Is it a progressive budget ? How investment going to get affected – Positive and negative factors?

    1. Anjum, It is very difficult to say as some people would get benefit and some would not. I am posting an article on where to invest and get maximum benefit from this budget. This article would come on Monday. As an investor, I would prefer to know positives for me

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