The Finance Minister Arun Jaitley in his budget proposals said there is no change in income tax rates, surcharge and educational cess. To provide relief to small and marginal tax payers, personal income tax exemption limit is being raised from Rs. 2 lakh to Rs. 2.5 lakh.
For senior citizens, the exemption limit will be Rs. 3 lakh. Further, the investment limit under Section 80C of the Income-tax Act is being raised from Rs. 1 lakh to Rs. 1.5 lakh. Deduction limit for interest on housing loan (for self-occupied house property) goes up from Rs. 1.5 lakh to Rs. 2 lakh. Free baggage allowance is proposed to be increased to Rs. 45000; it is Rs. 35000 at present.
To incentivise small entrepreneurs in the manufacturing sector, it is proposed to provide investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs. 25 crore in any year in new plant and machinery.
This benefit will be available for three years i.e. for investments upto 31.03.2017. The scheme announced last year, to provide investment allowance to manufacturing companies investing more than Rs. 100 crore in plant and machinery will continue till March, 2015.
Investment linked deduction is being extended to two new sectors, namely, slurry pipelines for the transportation of iron ore, and semi-conductor wafer fabrication manufacturing units. Ten-year tax holiday is being proposed to the undertakings which begin generation, distribution and transmission of power by 31.03.2017. This long-term measure will help the investors to plan their investments better.
