The document provides an analysis of the Union Budget of 2014 in India. It summarizes the key points of direct taxes, indirect taxes, and other economic initiatives. Some of the major tax changes include an increase in the basic exemption limit for individuals and a 15% additional investment allowance for manufacturing companies. New initiatives involve the development of 100 smart cities, increasing FDI limits in defense, and allocating funds for cleanliness projects and new universities. The analysis concludes that while the budget has some limitations, it aims to boost economic growth through various investment incentives and infrastructure projects.

1. Union Budget 2014 – An Analysis
Union Budget
2014

2. CONTENTS
 Direct Tax
 Indirect Tax
 Other

3. DIRECT TAXES
 Basic Exemption limit for Individual and HUF increased by Rs. 50,000 to Rs.
2,50,00 and for Senior Citizens to Rs. 3,00,000.00
 No change in tax rates for Company / Firm Society.
 No Change in Surcharge and Education Cess.
 In the PPF Scheme, annual investment ceiling will be enhanced to INR 150,000
from INR 100,000 at present.
 15% additional investment allowance to manufacturing undertakings investing
more than INR 250 millions per year in Plant and Machinery upto 31 March, 2017.
Existing benefit of investment allowance to continue
 10-year tax holiday to undertakings that begin generation, distribution and
transmission of power by 31 March, 2017
 For set-off or carry forward and set-off of losses, business of trade in shares
excluded from the definition of speculation business.
 Expenditure on the corporate social responsibility (CSR) will not ordinarily be
allowed as deduction
 Mutual Funds, Securitization trusts and Venture Capital Companies or Venture
Capital Funds obligated to file returns of income
 More AAR Benches to be constituted, Scheme of Advance ruling supposed to be
extended to resident taxpayer.

4. INDIRECT TAXES
 Online and mobile advertisement will be under the Service Tax net.
 Renting of immovable property by Educational Institutions will not enjoy the exemption in
service tax.
 Exemption to ‘auxiliary educational services’ received by an educational institution
replaced with a specific list of services received by an educational institution such as
transportation of students, staff, etc, catering, security, cleaning, etc
 Following Services are exempted from the Service
Tax. .
 · Services provided by a tour operator to a foreign tourist in relation to tour
conducted wholly outside India
 · Life micro-insurance schemes for the poor, approved by IRDA, where sum
assured does not exceed rupees fifty thousand.
 -Services availed by RBI from outside India in relation to management of
foreign exchange reserves.·
 . Technical testing or analysis of newly developed drugs on human participants
by a clinical

5. CONTINUED
 research organization, has been removed.
 Reverse charge mechanism extended to include recovery agent services
provided to banks, NBFC's and other financial institutions.
 Proportion of service tax payable under reverse charge by a service recipient
of rent-a-cab services (non-abated) increased to 50% (effective 1 October
2014)
 CENVAT credit of services provided by one rent-a-cab scheme operator to
another and by one tour operator to another tour operator allowed (effective 1
October 2014)
 Removed the Special additional duty (SAD) from inputs / components used in
the manufacture of personal computers.
 Reduction of Basic custom duty from the LCD and LED below 19 inches from
10% to NIL.
 Increase in Excise duty on cigarettes.

6. OTHER (STATE OF ECONOMY)
 Proposal for developing 100 smart cities
 FDI limit in Defense sector has been increased to 49% from 26% however
subject to the condition that ownership and management will be in under
Indian citizens
 Rs. 150 Crores provided for Women safety
 Provision of Rs. 200 Crores for Statue of Unity a Gujrat government initiative
 Rs. 2037 Crores for Ganga Cleaning plan “Namami Gange”.
 4 new AIIMS and 5 new IITs & IIMs

7. ANALYSIS
 Finance minister did not pull his hands in making provision for various projects.
Govt. has opened the FDI up to 49% in defense sector, a sudden move criticized
by many leaders in opposition but a necessary one to fund the current defense
budget which is 12.5% higher than last budget and also a means to achieve govt.
goal to shift the import of defense equipments to own manufacturing. In a bid to
increase revenue, govt. has increased the excise duty in the range of 11% to 72%
on cigarettes serving dual purposes. The move to bring online and mobile
promotions under the ambit of service tax is another means to increase cash on
the rising trend of internet promotions.
 Allocation of funds for Ganga Cleaning plan and development of new IITs, IIM,
AIIMs is indicative of the government vision for infrastructure development.
Definitely 100 smart cities provisioned in the budget provide for reducing the
burden on current metro cities and encourage inclusive growth. 10 year tax holiday
period to the undertakings for generation, transmission and distribution of
electricity is definitely to promote investment in this sector thus solving India’s
energy problems.However non allowance of expenditure on CSR activities comes
as disappointing news for the companies.
 Summarizing the budget it can be said that Arun Jaitley did the needful for giving a
boost to India’s growth. Although there are some grey areas in the budget but he
made no mistake to justify his position in his first budget and has left no stone
unturned in his endeavors to kick start the economy.

8.  THANK YOU