Highlights of the Budget:

* Income tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3
lakh
* Exemption limit for investment in financial instruments under 80C raised to Rs 1.5 lakh from
Rs 1 lakh.
* Investment limit in PPF raised to Rs 1.5 lakh from Rs 1 lakh
* Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh from Rs 1.5
lakh.

Union Budget Direct tax proposals an Individual Point of view
Introduction: Union budget-2014-15 presented by the Finance Minister today. New
Government has presented this budget with facing several challenges like economic growth,
GDP, Inflation and expectations from various sectors including individuals. This budget is not
fulfilled everyone expectation, however it covered the steps which revive the economic growth
in positive ways, this only has been told by the Finance minister that steps are only beginning of
the journey towards a sustained growth of 7-8 % or above within 3-4 years along with macro-
economic stabilization. In this article I would like to discuss about the direct tax proposals by the
point of view of individual.
1. Increase of Basic exemption limit: Major expectation of increase in basic exemption limit
has been given in the budget; the limit has been increased from Rs.2 lakhs to Rs. 2.50 lakhs for
individuals except senior citizens and for senior citizens between 60 to 80 years has been
increased from Rs. 2.50 lakhs to Rs. 3 lakhs. The revised income tax slabs are given below the
table
Rates for Individuals below 60 years
Income slabs Income tax rate
Income up to Rs. 2.50 lakhs Nil
Rs. 2.50 to Rs. 5 lakhs 10%
Rs.5 Lakhs to Rs. 10 Lakhs 20%
Rs. 10 lakhs above 30%
Rates for Individuals below 60 years below 80 Years
Income slabs Income tax rate
Income up to Rs. 3 lakhs Nil
Rs. 3 to Rs. 5 lakhs 10%
Rs.5 Lakhs to Rs. 10 Lakhs 20%
Rs. 10 lakhs above 30%
Rates for Individuals 80 years & above
Income slabs Income tax rate
Income up to Rs. 3 lakhs Nil
Rs. 3 to Rs. 5 lakhs Nil
Rs.5 Lakhs to Rs. 10 Lakhs 20%
Rs. 10 lakhs above 30%
Surcharge of 10% on Income tax those taxable income exceeds Rs. 10 crore will apply.
Education cess will apply 3% on the Income tax & Surcharge will apply for all.
These changes in slab will give to individuals a minimum tax relief of Rs.5150
2. Increase in limit under section 80C: Very famous section among individuals is section 80C,
the section gives rebate for various savings scheme till now Rs. 1 lakhs has been enhanced to Rs.
1.50 lakhs . This changes will give boost to habit of savings by the individuals and also give the
minimum tax relief of Rs.5150
3. Increase in Public provident fund: Present investment cap of Rs. 1 Lakh under PPF scheme
has been enhanced to Rs.1.50 lakhs which will help in the cap under section 80C. This change
will attract & help to make savings under PPF by the individuals
4. Increase in housing interest deduction: One more major section which individuals claim is
housing loan interest under section 24. Existing limit of Rs.1.50 lakhs for self occupied property
interest deduction has been enhanced to Rs. 2 lakhs. This will give the marginal tax relief of
Rs.5150 for those are claiming interest for self occupied property.
5. Increase tax rate on long term capital gain: Current tax rate on Long term capital gain has
been increased from 10% to 20% on transfer of units of Mutual funds except equity oriented
funds.
Conclusion: As an individual tax payer point of view, this budget given the minimum marginal
relief of Rs. 5150 without any additional savings & Rs. 10,300 with an additional savings of Rs.
50000/-. Also made marginal satisfaction on those have saving more than Rs. 1 Lakh and unable
to claim earlier years.