The interim Budget 2014-15 has been presented today, 17th Feb, 2014 by Sh. P. Chidambaram, Finance Minister. As per the Interim Budget speech of the Finance Minister, the economy has been stable since past two years. There has been a decline in the fiscal deficit, the current account deficit has been contained, inflation has been moderated, the quarterly growth rate is on the rise, the exchange rate is stable, exports have increased, and hundreds of projects have been unblocked.

Being an interim Budget, status quo in respect of tax rates has been maintained as regards income tax. No major changes in tax laws have been proposed. A Research Funding Organization is proposed to be set up that will fund research projects selected through a competitive process and contributions to that organization will be eligible for tax benefits. Since legislative changes to make this effective would be introduced at the time of the regular Budget, commenting on the same would not be appropriate.

Hon’ble Finance Minister, in his Budget speech today, has announced that the Direct Taxes Code will be placed on the website for public discussion. Like in past, if required, this time also ICAI will be submitting its inputs on the same. It is hoped that the new DTC, giving due weightage to the recommendations of the Standing Committee, would ultimately incorporate the best global practices, and at the same time, maintain the right balance between simplicity and equity. He has appealed to all political parties to resolve to pass the GST laws and the DTC in 2014-15.

As expected some tinkering has been done with regard to the rates of Indirect taxes. Loading, unloading, packing, storage and warehousing of rice has rightly been exempted from service tax. Considering that stem cells are proving to be a panacea of all types of genetic blood disorders, exempting the services provided by cord blood banks is a step in the right direction.

In order to stimulate growth in the capital goods and consumer non-durables, excise duty thereon has been reduced from 12% to 10%. Automobiles sector has been given a boost by reducing excise duty on almost types of vehicles. The restructuring of excise duty on mobile handsets will encourage declining domestic production and reduce imports.