Finance Minister Arun Jaitley today doled out income tax sops by raising threshold exemption and investment limits by Rs 50,000, raised duties on cigarettes, tobacco, pan-masala and aerated drinks, widened service tax base and announced measures to spur growth manufacturing and revive investor confidence.
Without tinkering with the tax rates and allowing continuing 3 per cent education cess on all tax payers, he provided encouraging signals for domestic and foreign investors offering not to "ordinarily" bring about any tax change retrospectively which creates a fresh liability.
Speaking to PTI after presenting his maiden budget in Parliament, he ruled out resorting to retrospective taxation and said "ordinarily we will not legislate to create fresh liability."
Jaitley said he has taken important steps that were nececssary but not taken in the last 10 years to put the economy back on track.
The budget for 2014-15 raised the threshold income tax exemption limit from Rs 2 lakh to Rs 2.5 lakh and investments under 80C by Rs 50,000 to Rs 1.5 lakh, and raised interest exemption on housing loan on self-occupied property by Rs 50,000 to Rs 2 lakh.
The exemption limit for senior citizens has been raised from Rs 2.5 lakh to Rs 3 lakh. The tax sops could leave up to Rs 40,000 in the hands of assessees.
However, there is no change in rate of surcharge either for the corporates or individuals and the education cess of three per cent will also continue.
Baggage allowance for passengers returning from abroad has been raised from from Rs 35,000 to Rs 45,000.
The Budget makes cigarettes, tobacco, pan-masala, gutka and cold-drinks costlier by raising excise duties while CRT TVs used by poor, LCD and LED TV panels of less than 19-inches will be cheaper through cuts in customs duties.
Direct tax proposals in the budget involve a sacrifice of Rs 22,200 crore while indirect tax proposals will yield a revenue of Rs 7,525 crore.