Highlights of Budget 2014
In the Union Budget yesterday, Finance Minister Arun Jaitley presented the first budget of the NDA government headed by Narendra Modi. Here are a few ways the life of a common man changed so far.
1) The Public Provident Fund limit has been enhanced to Rs 1.5 lakh per annum from Rs 1 lakh. This is one of the best news for investors as the PPF is a tax free financial instrument.
2) Those with home loan have added reasons for cheer, reason being FM has now hiked home loan tax deduction limit u/s 24 from Rs. 1.5 lakh to Rs 2 lakh.
3) Individual tax payers will get exemptions of Rs 2.5 lakh, the limit has been increased by Rs 50,000. prior to this it was Rs 2 lakh. Senior citizens have not been left out either, tax exemption limit for senior citizens changed from Rs 2.5 lakh to Rs 3 lakhs.
4) To increase investment limit under Section 80 C from Rs 1 lakh to Rs 1.5 lakh. Debt mutual funds will be negatively impacted as Long Term Capital Gain tax has been increased to 20 percent from 10 percent. Long term for debt funds will mean more than 36 months, prior it was 12 months.
5) The Employee Provident Fund Office will launch a unified account scheme for portability of provident fund. Earlier this year, the EPFO had a universal account number, which would make transferring the EPF account easier, when the account holder changes jobs.
6) The FM proposed uniform KYC norms for entire financial sector, as well as a one single demat account for all financial assets. This will surely reduce operation headache for most retail investors.
7) Minimum pension of Rs 1,000 for organised sector employees. This move will benefit more than 28 lakh pensioners who are getting less than Rs 1,000 as pension every month.
8) Happy news for those looking for education loan, the FM has promised easy norms for loans for higher education.
9) As far as tax instrument go, the Kisan Vikas Parta financial instrument will be reintroduced. Goods new for those who are debt instruments fans. Kisan Vikas Patra (KVP) was discontinued in 2011 due to apprehensions of it getting used for money laundering.
10) If you are looking to study further in institutions like AIIMS or IIM, there’s good news again. FM announced that 5 more AIIMS institutions will be opened in Andra Pradesh, West Bengal,Vidarbha in Maharashtra and Purvanchal. And, 5 new IIMs in Himachal Pradesh, Punjab, Bihar, Odisha & Maharashtra.
11) National Savings Certificate will now come with an insurance cover. As far as small savings go, a special small saving instrument will be launched for girl child, which will have a special rate of return.