What is good and bad in latest union budget 2014-15

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The budget could be a joy to behold. The good part is that the Finance Minister has not made exaggeratedly hopeful projections, and so the scope for disappointment could be limited.

 

Good:

  • Bank loans for infra sector to be exempt from CRR, SLR. This should reduce cost of funds for infra companies, and hopefully boost infrastructure.

 

  •  FY15 fiscal deficit target pegged at 4.1 percent, FY16 at 3.6 percent .

 

  •  Foreign institutional investors’ capital gains to be taxed, and not business income.

 

  •  Tax-pass through allowed for real estate, infrastructure investment trusts to avoid double taxation.

 

  • Power plants going operational in March 2015 to get adequate coal supply.

 

  • Tax holiday for power generation companies extended till 2017.

 

  • Subsidy expenses estimated at Rs 2.5 Lakh Crore, almost the same as in the interim Budget

 

  • FDI in insurance sector hiked from 26 percent to 49 percent.

 

  •  I-T exemption limit hiked to Rs 2.5 lakh for those below 60 years and up to Rs 3 lakh for senior citizens.

 

  • Divestment target not very aggressive at Rs 43,425 crore. This means that government is not relying heavily on divestment to bridge fiscal deficit .

 

  • Budgetary provision for Pooled Municipal Debt Obligation enhanced from Rs 5000 crores to Rs 50,000 crores to promote and finance infrastructure projects in urban areas on shared risk basis.

 

Bad:
    

  •        No move to repeal retrospective tax amendments

 

  •      No clear plan to reduce subsidies.

 

  •     No clear plan to recapitalize PSU banks or tackle the NPA problem

 

  •      No cut in gold import duty.

 

  •      No clear time line for implementation of GST

 

  •      No mention of GAAR

 

  •      Rs.200 crores set for Sardar Patel’s Statue.
Replies (1)
1) Allowances/perquisites not touched for last so many FY, ie, conveyance should be increased from 800 to 1800 pm, medical reimbursement should be increased from from 15,000/- to 25,000/- pa. 2) U/s 54EC, the limit for investment in one FY should be increased from 50 lacs to 75 lacs. 3) Clubbing provisions also needs some amendments ie exempt income from minor should be increased from 1,500 to 10,000/- pa. 4) Maintenance/alimony paid can be claimed as deduction from income. 5) Some tax benefits for Recurring deposit accountholders.


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