Dear Professional Colleagues,

Warm Greetings to you!

The new government’s maiden budget has been presented by Hon’ble Finance Minister Shri Arun Jaitley on 10th July 2014. This year’s Budget is quite progressive and will spur investment-led sustainable and inclusive growth.  It is quite evident that budget has announced far reaching reforms especially on the tax administration front.

Union Budget 2014-15, focuses on fiscal consolidation and outlines a fiscal deficit target of 4.1% for 2014-15, 3.6% for 2015-16 and 3% for 2016-17. There had been promotion of FDIs in select sectors. Additionally, the funds have been infused for Bank Capitalization, PSU Capital Expenditure, Smart Cities, Irrigation etc. Funds and schemes for Senior Citizens and Women & Child Development have been designed. Education sector has also been given a boost by increasing the counts of IITs, IIMs, and AIIMS etc. A major reform is the virtuous news of approval of legislative scheme for introduction of much awaited Goods and Services Tax (GST).

Direct Taxes have remained unfazed with a recalibration of tax slabs and increase in deduction and allowing higher amounts of investments. Indirect Taxes side also has seen some important changes. Advance rulings have been made available for resident private limited companies. Basic rate of excise remains same with minor changes in rates of duty in case of capital goods, consumer durables and automobile sectors. There are other changes like Customs rates have been rationalized, interest rate slab has been prescribed in service tax.

Given the existing situation and considering the fact that the new government had a limited time to present the budget, the Finance Minister recognizing limited room for fiscal operations, has chosen to present a functioning budget, perhaps as a provisional measure and a prelude to concrete & gallant steps which India requires to take to revive its existing state of affairs. The Union Budget 2014-15 paves the way for a strong and vibrant economy. I am confident that this progressive and growth oriented budget would facilitate the emergence of a resurgent India.

I am happy that Indirect Taxes Committee (IDTC), Direct Taxes Committee (DTC), Committee of International Taxation (CIT) and Committee on Public Finance and Government Accounting (CPFGA) jointly brought an E-Flash on Amendment made by Finance Act (No. 2), 2014 for the benefit of the members (please click to open the link).

I express my appreciation to CA. Atul Kumar Gupta, Chairman, IDTC, CA. G. Sekar, Chairman, DTC, CA. Vijay Garg, Chairman, CPFGA and CA. Nihar Jambusaria, Chairman, CIT for this initiative and hope that members will find this E-Flash useful to comprehend the amendments in the Finance Act (No. 2).

With kind regards,

CA. K. Raghu
President, ICAI

Source- Email from ICAI

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