A balanced budget with a lot of promise
The finance minister has pushed for an inclusive agenda that focuses on macro-economic stabilisation, lower inflation, sustained level of external sector balance and fiscal prudence, says M Lakshminarayanan, Managing partner, Deloitte Haskins and Sells.india Updated: Jul 11, 2014 00:35 IST
The finance minister has pushed for an inclusive agenda that focuses on macro-economic stabilisation, lower inflation, sustained level of external sector balance and fiscal prudence.
Tax Rates: no change, some relief
The tax rates have not been changed. However, the threshold fortaxation of individuals has been raised to Rs 2.5 lakh from Rs 2 lakh and in the case of senior citizens to Rs 3 lakh from the present limit of Rs 250,000. The deduction in respect of certain payments have been raised to Rs 1.5 lakh to encourage long-term savings, and the deduction limit on account of interest on home-loans for self-occupied property raised from Rs 1.5 lakh to Rs 2 Lakh.
Growth–the industry way
With a view to attract large scale investment in infrastructure and construction, the finance minister has provided a conducive taxregime for the Infrastructure Investment Trusts and Real Estate Investment Trusts (REIT).
Deduction for new plant and machinery has been expanded to companies with investments of more than Rs 25 crore in any one year, and tax holiday benefits to power generation, distribution and transmission companies has been extended to firms that start operations on or before March 31 2017. The increase of the limit of 26% in FDI for insurance and defence to 49% is a welcome move.
Retrospective Amendments: look ahead
The finance minister has refused to do away with the retrospective amendments, but assured taxpayers that his government will not ordinarily bring about any change retrospectively that creates a fresh liability.
Dispute resolution mechanism
In order to reduce litigation in direct taxes, the minister has proposed certain legislative and administrative changes. The facility of approaching the Advance Rulings Authority has been extended to resident tax payers.
GST: hope in sight
Jaitley has said he is hopeful of finding a solution for the states’ apprehension of losing tax revenues if GST is introduced, and bringing the legislation in April 2015.