By TIOL News Service

NEW DELHI, JULY 10, 2014: IT was Modi Sarkar's maiden budget and the resolve was not to disappoint individual taxpayers at any cost. And it really cost the exchequer a bomb! At the cost of Rs 22200 Crore, the Union Finance Minister, Mr Arun Jaitley, today managed not to disappoint the individual taxpayers. In his Budget Speech Mr Jaitley announced a hike of Rs 50,000/- in the general tax exemption limit. Thus, it has become Rs 2.5 lakh for all taxpayers. For Senior Citizens, the limit has gone up to Rs three lakhs.

With no change in the tax rates Mr Jaitley also annonced that there is no change in the rate of surcharge either for the corporates or the individuals, HUFs, firms etc. However, the budget proposes to continue with education cess at 3 percent.

Investment limit under section 80C of the Income-tax Act has also been raised from Rs. 1 lakh to Rs. 1.5 lakh and Deduction limit on account of interest on loan in respect of self occupied house property raised from Rs.1.5 lakh to Rs.2 lakh. To incentivize small entrepreneurs an Investment allowance at the rate of 15 percent has been proposed to a manufacturing company that invests more than Rs. 25 crore in any year in new plant and machinery.

To augment low cost long term foreign borrowings for Indian companies, the eligible date of borrowing in foreign currency has been extended from 31.03.2015 to 31.03.2017 for a concessional tax rate of 5 percent on interest payments. Tax incentive extended to all types of bonds instead of only infrastructure bonds.