Tag: Budget 2014
As the presentation of the budget 2014-15 was a set of promises by the Modi’s government to improve the country’s financial health and enhancing the infrastructural as well as economic background to fight with inflation.
However the common people are concerned about the impact of various tax reforms on their monthly house-hold budget and planning of personal finances made for the future. Here is a glance on the impact of budget on the lives and finances of common player in the country.
Increase in Income Tax Exemption limit:
One of the welcoming announcement done by the Finance Minister for the huge percentage of the census is an increase in personal income tax exemption limit by Rs. 50,000 across all categories. This will affect the lives of many middle class people which makes a huge part in the census of our country. If you are a tax payer and know the tax-slabs then it is one of the good change expected by you. Any tax payer aging below 60 years earning an amount up to Rs. 2.5 Lakhs get an exemption of Rs. 50,000 in their annual income compare to the earlier limit of Rs. 2 LAKHs. There is also a relief for senior citizens it increased upto Rs. 3 Lakhs from the existing Rs. 2.5 LAKHs. There has been no modification in the tax slab, surcharge rate and education cess for either corporate, individuals of Hindu Undivided Families.
Hike in Tax Exemption Limit under Section 80c to boosts retail banking products:
As the government wants to increase the saving habit of every household, there is a policy announced by FM in the budget. It is an increase in the exemption limit in the income tax act under section 80C to influence the common person. The limit has been raised from the present level of Rs. 1 Lakh to the new one of Rs. 1.5 Lakh. As Section 80C covers various investment instruments like NSCs, housing loans, public provident fund schemes, insurance premiums, EPF and ELSS. So, people tend towards using these options for the optimum utilization of their savings and also to save more amount in tax. This is also a nice announcement for the insurance and baking sector.
Increase in Investment limit of PPF:
According to the financial experts after an increase in the Public Provident Fund or PPF investment limit from the prior Rs.1 Lakh to Rs 1.5 Lakhs, investors will now taking PPF investment as a standalone investment product and not just a part of Section 80c tax savings plan.
Announcement of New Personal Finance Instruments:
The budget was focusing on more investment and support both planned and unplanned savings. FM announced some new instruments that can be used for personal financing. A special saving scheme has been launched for the girl child focusing on education, higher education and marriage. There is also a plan to have a single demat account linking all the financial transactions at one place making it easy for the investors to manage the investment account.
Non equity mutual funds:
Among all the exemptions there is a bad news for the long term investors. The investment fall under non-equity categories for example mutual fund schemes there is a hike in the capital gains tax on non-equity mutual funds from 10% to 20%. The duration of the long term plans has also been changed from the current period of 1 year to 3 years. With the announcement public interest in non equity mutual funds like FMPs, gold funds and various international funds is likely to reduce. This may mean increased interest in traditional fixed deposit plans and other financial instruments offering tax concessions under section 80c.
The is a good news for the people dreaming about their own house. There is a tax exemption on the interest paid on the self occupied house under the housing loan from Rs 1.5 to Rs 2 Lakhs. After this announcement for rural and affordable housing, the possibility that more people tend towards applying for home loan in near future.
Overall impact on day to day spending:
Apart from the saving and investment of the personal funds, the budget also affected the daily financial spending of the common man. Like electronic items, mobile phones and shoes priced between Rs. 500-1000 become cheaper whereas tobacco related product’s excise duty has been doubled.
And last but not the least, there are more welcoming nodes rather than the thorns in the budget which is a mixed happiness for the commonairs of India.
Revenue generated after the collection of total taxes was set as Rs.736,221 crore by the Finance Minister Arun Jaitley in the national budget 2014-15 presented in the parliament dated 10th July 2014. In this budget all the revenues and expenditures are introduced publicly and a collection target of Rs. 736,221 crore was estimated for the financial year 2014-15 from various sources and taxes launched.
Mr. Jaitley was attending a two-day Annual Conference of the senior officers of Income Tax Department is held every year and this year it was held in New Delhi 21 – 22 July 2014. Along with the FM this conference was attended by the senior officers of the Revenue Department Shri Shaktikant Das, Revenue Secretary, Shri G.S. Sandhu, Secretary, Financial Services, Shri Ravi Mathur, Secretary (Disinvestment), Chairman and Members of CBDT, Chairperson and Members of CBEC.
After the inaugural ceremony of the conference, while addressing the senior members and other officers of the Income tax department Jaitely denoted the department’s credibility and accountability as country’s biggest asset. He shows that the government is hoping that the revenue target of Rs. 736,221 crore can be surpassed by the good techniques and dedication of the department. He further added that, “highest standards of ethics are expected from officers of the department.” to achieve the set target and increase the reputation too.
Further in the conference, Mr, Shaktikanta Das the Revenue Secretary said that the role play of the senior officers works as a guide for the junior and other staff working under them. Thus, it is necessary to use the fair and transparent means to facilitate and achieve the targets. There is a need to find the innovative ways to increase the collection of revenue without litigation.
However, other speakers added that various steps to be taken to smoothen the tax paying activity. The utmost efforts are required to improvise the quality of the tax payer services and achieve the targets. It is also important to brought efficiency and transparency in the whole process to attract tax payers towards their duty of paying tax on time. This will not only helpful to sustain the laws but also enhance the economic condition of the country to implement the growth driven strategies.
For more updates on Budget or post effects of Budget on stock market, keep reading further posts.
The most awaiting, 6th BRICS Summit was held from 14 July to 16 July 2014. The host city was Fortaleza in Brazil, one of the member country out of five. It was hosted with Cristina Kirchner, Argentinian President as the special guest at the summit.
Some Basic Facts
BRICS consists of a group of major emerging economic countries – Brazil, Russia, India, China and South Africa.
It was previously known as BRIC, consist of four participating countries. South Africa is the newest among them to join the group and formed BRICS, which got its full membership in December 2010.
The main concern behind to form this group is to support each other on various issues like food crisis, world economy, growth, infrastructural development and so on.
Sixth BRICS Summit
This was the sixth and PM Narendra Modi’s first summit. This year it played a very important role to make the grouped countries financially independent by inaugurating the DEVELOPMENT BANK. The teamed countries were working on the same idea for few years. This year the site for headquarter and few different things were decided .
Joy and Disappointment of India
India miss the opportunity to set the headquarter on the choice between China’s Shanghai and India’s New Delhi. As Shanghai and New Delhi were the closest competitor. Shanghai has been decided to take the privilege of having the headquarter of the development bank. India has been granted presidency of the bank for the first five years, so the first president of the bank is from Indian origin. Also, BRICS bank having a rotating five-year presidency among the members countries.
About Development Bank
This bank is a $100 billion bank act as a reserve currency pool and help the nations involved in the Summit. This bank supports the BRICS countries infrastructural and sustainable development projects such as power stations and electricity supply grids, ports, roads, telecommunications networks, water and sewerage by lending money from the bank.
This BANK is a step towards cut out the influence of Western-based lending institutions like IMF and World bank as well as the dollar. The initial contribution of the BRICS countries is as follows –
Brazil : $18 billion
Russia : $18 billion
India : $18 billion
China : $41 billion
South Africa : $5 billion
There are plans to provide loans to other countries too in future depending on the growth and success of the step. This is really a big decision which will affect the value of dollar against various currencies which were influenced at the time when a country use to take loan from the institutions like IMF and World Bank, as both are situated in Washington thus having great influence at the time of negotiation.
The effect of this bank and its impact on the Indian currency can be seen in few days in the Indian currency market. Hoping for the best results.