The union budget 2014, one of the most awaited events since the Modi government came to power, was presented yesterday by the finance minister.

Here is what  it means/changes for you as a common investor and tax payer-

Personal tax front –

The tax exemption limit has been raised from Rs 2 lakhs to Rs 2.5 lakhs for individuals and from Rs 2.5 lakhs to Rs 3 lakhs for senior citizens. The rate of surcharge and education cess remains unchanged.

Section 80 C limit raised from Rs 1 lakh to Rs 1.5 lakh.

Benefit illustration for an individual with a taxable annual income of Rs 20 lakhs excluding 80 C rebate-

Annual tax exemption limit on interest component of housing loan raised from 1.5 lakh to 2 lakhs- this is a much needed relief for people who have taken huge loans and have a significant interest burden owing to the sharp increase in real estate prices over the last few years.

Investment front –

Annual investment ceiling in PPF (Public Provident Fund) raised from 1 lakh to 1.5 lakh. PPF remains one of the most attractive avenues for long term investment in the fixed income category with the investment eligible for a tax rebate, tax free interest and the maturity proceeds also exempt from tax.

Long term capital gains tax on debt mutual funds increased from 10 % to 20 % and the minimum tenure to qualify as long term increased from 12 months to 36 months. Hence to get indexation benefit on long term gains, one has to be invested in debt oriented mutual funds for a minimum of 3 years. This makes the short to medium term debt funds unattractive for investing.

Proposed small savings scheme for the girl child’s education and marriage and Kisan Vikas Patra to be re-introduced under the small savings schemes.

Single KYC to be applicable across all financial products. Currently the KYC is standardized across mutual funds only.

National Savings Scheme with Insurance cover proposed.