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Seth Dua & Associates

New Delhi, India

1. DIRECT TAXES
1.1. Personal Taxation
1.1.1. Changes in effective tax rates
Basic income tax exemption limit for individuals has been increased to INR 2,50,000 from INR 2,00,000.
Further, basic income tax exemption limit for senior citizens (sixty years or more but less than eighty years) has been increased to INR 3,00,000 from INR 2,50,000.
1.1.2. Tax relief and welfare measures

  • The limit of deduction under section 80C has been increased from the existing INR 1 lac to INR 1.5 lac.
  • The limit of deduction on account of interest in respect of property has been increased to INR 2 lacs from INR One lac fifty thousand.

1.2. Corporate Tax
1.2.1. Concessional tax rate on interest

  • Concessional tax rate of 5% on interest payable on long term borrowings from foreign lenders, which was available for borrowings made till 2015, has been extended to borrowings made till 2017.
  • With a view to encourage Indian companies to repatriate foreign dividends into the country, it is proposed to extend the benefit of lower rate of taxation on foreign dividends repatriated into Indian without limiting it to a particular year. Thus, such foreign dividends received in financial year 2014-15 and subsequent financial years shall continue to be taxed at the lower rate of 15%.

1.2.2. Deduction for investment in new plant and machinery

  • A company, engaged in manufacture/production, which acquires and installs plant and machinery (other than specified excluded items) during the period April 1, 2013 to March 31, 2015 was allowed a deduction @ 15% of the aggregate amount of actual cost of such plant and machinery provided the aggregate amount of such investment is not less than INR 1 billion under section 32AC of the Income Tax Act, 1961 (‘IT Act’).
  • In order to simplify the existing provisions of section 32AC of the IT Act and also to make medium size investments in plant and machinery eligible for deduction, it is... India Union Budget 2014-15 Insight - Complete Article

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