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Budget 2014: Whither “Good Days” For Aam Aadmi

Published on Thu, Jul 10,2014 | 22:19, Updated at Thu, Jul 10 at 22:19Source : Moneycontrol.com 

By: Aseem Chawla, Managing Partner, MPC Legal

Shri Arun Jaitley, the Finance Minister in his maiden speech at the Parliament presented the Union Budget 14-15, suggesting that the result of the General Elections 2014, suggesting the urge of people of this country to grow and free themselves from the curse of poverty, and that the Indian economy shall have to maneuver its way through a sluggish global economy.  

Many would suggest that considering the underlying circumstances and barely being in the seat for a month and a half, this budget was a realistic exposition.

The budget presented has raised the personal income tax exemption limit for individuals, Hindu Undivided Family (‘HUF’), by Rs. 50,000 thereby, increasing the limit from 2, 00,000 to Rs. 2,50, 000. However, in case of individuals being resident in India and aged 60 years or more but less than 80 years, the limit has been extended from Rs. 2, 50,000 to Rs. 3, 00,000. Although no changes have been made to existing surcharge rate and education cess rate for individuals, HUF, corporate etc.

Keeping in mind the present inflationary trend and relevance of savings, the instant proposals do provide amending section 80C of the Income Tax Act, 1961(‘Act’) wherein an Individual or a HUF is allowed deduction from income of an amount not exceeding Rs. one lac with respect to sums paid or deposited in the previous year, in respect of instrument like insurance premium, contributions to Provident Fund, schemes for deferred annuities etc., by increasing the ceiling limit to Rs. 1, 50,000. In furtherance, of the exemption limit raised in 80C, similar limit has been raised in section 80CCE i.e. aggregate deduction allowed under section 80C, 80CCC and 80CCD of the Act from One lac to One lac fifty thousand.

Further, the existing provisions of Section 24 of the Act, provided that while computing income chargeable under the head Income from House Property, deduction shall be made in respect of a self occupied property with borrowed capital, any amount of interest payable on such capital to the extent of Rs. one lac fifty thousand in case the property is acquired or construction is completed within three years from the end of the financial year in which capital is borrowed. The limit has now been extended to Rs. two lacs.

Raising tax exemption limits and reducing the tax rates has always been an insatiable for every taxpayer from the incoming government. The budget has proposed provisions to enhance the personal disposable income however, one would have anticipated more relief from this budget especially in Section 80D, deduction in respect of health insurance premia; Section 80EE, deduction in respect of loan taken from residential house property; Section 80TTA , deduction in respect of interest in deposits in saving accounts. Exempt allowances like children education, transport allowances, wherein the amount specified has remained stagnant for years and can be said to be less of worth, in the present times. In view of the above, one could have said “YEH DIL MAANGE MORE”!

(Priyanka Mongia, Associate, MPC Legal also contributed to this article)

 
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