Income tax changes from Union Budget 2014-15: Are they still applicable in 2026?

Union Budget Speech 2014-15 was presented by the then Finance Minister Late Arun Jaitley. He made several popular announcements, some of which are applicable even in 2026.

Union Budget 2014-15: Key changes and relevance in 2026

Basic exemption limit hiked by ₹50,000

Budget 2014 increased the basic exemption limit from ₹2 lakh to ₹2.5 lakh for individual taxpayers and from ₹2.5 lakh to ₹3 lakh for senior citizens. However, there was no change in tax slabs and rates.

"Madam Speaker, I do not propose to make any change in the tax rate. However, with a view to provide relief to small and marginal taxpayers and senior citizens, I propose to increase personal income tax exemption limit by ₹50,000 that is, from ₹2 lakh to ₹2.5 lakh in the case of individual taxpayers who are below the age of 60 years. Similarly, I also propose to raise the exemption limit from ₹2.5 lakh to ₹3 lakh in the case of senior citizens," Jaitley said.

Budget 2014 also did not propose any change in the rate of surcharge, either for the corporates or the individuals, HUFs, firms etc. Further, it continued with the 3% education cess.

There are now two regimes: new and Old. The basic exemption limit announced in Budget 2014-15 remains relevant even today, but only for taxpayers opting for the old tax regime. The exemption limit under the new tax regime is ₹4 lakh from FY 2025-26.

The new regime now also offers much better slabs and rates compared to 2014-15. Further, the cess is now known as "Health and Education Cess", charged at 4%.

LTCG tax on non-equity funds at 20%

Budget 2014 proposed long-term capital gains tax of 20% for other than equity-mutual funds.

Explaining the reason for this proposal, Jaitley said, "In the case of Mutual Funds, other than equity-oriented funds, the capital gains arising on transfer of units held for more than a year is taxed at a concessional rate of 10% whereas direct investments in banks and other debt instruments attract a higher rate of tax. This allows tax arbitrage opportunity. This arbitrage has hardly benefitted retail investors as their percentage is very small among such Mutual Fund investors."

Jaitley had also proposed to increase the period of holding in respect of such units from 12 months to 36 months for this purpose.

For FY 2025-26, there are only two holding periods for all types of investments: 12 months and 24 months. Further, long-term capital gains from mutual funds, including equity and non-equity mutual funds, are capped at 12.5%. Equity mutual funds also enjoy an exemption of ₹1.25 on long-term gains.

Dividend Taxation

Jaitley proposed to remove the anomaly related dividend taxation. He said, "In the year 2003, the tax liability on income by way of dividends was shifted from the shareholder to the company. The shareholder was required to pay tax on the gross dividends, but now the company pays tax on the dividend amount net of taxes. Similarly, in the case of Mutual Fund, income distribution tax is paid on the income distributed net of taxes. I propose to remove this anomaly both in the case of the company and the Mutual Fund."

Currently, investors pay tax on dividend income

Small savings scheme changes

Budget 2014 proposed to revitalise small savings schemes. "To address the concerns of decline in savings rate and improving returns for small savers, I propose to revitalize small savings," Jaitley said.

Jaitley said a National Savings Certificate with insurance cover will also be launched to provide additional benefits for the small saver.

"Kissan Vikas Patra (KVP) was a very popular instrument among small savers. I plan to reintroduce the instrument to encourage people, who may have banked and unbanked savings to invest in this instrument," Jaitley said.

Yes. All these small savings schemes are available even today, offering investors guaranteed and better than bank deposit returns. Schemes like PPF and SSY also offer tax benefits.

UAN, EPS minimum pension and wage ceiling hikes

Budget 2014 proposed to increase the minimum pension limit under EPS to ₹1000. This limit is applicable even today.

"The Government is notifying minimum pension of ₹1,000 per month to all subscriber members of EP Scheme and has made an initial provision of ₹250 crore in the current financial year to meet the expenditure."

Jaitley also announced an increase in mandatory wage ceiling of subscription to EPS from ₹6,500 to ₹15,000.

Further. the then finance minister proposed the introduction of a Uniform Account Number for EPFO members. "For the convenience of the subscribers, EPFO will launch the “Uniform Account Number” Service for contributing members to facilitate portability of Provident Fund accounts," Jaitley said.

Yes. All these EPF and EPS related proposals of Budget 2014 are applicable even today. In recent times, the EPFO has undertaken several initiatives to help EPF and EPS accountholders.

Section 80C limit increased

Budget 2014 increased the limit for deduction under Section 80C of the Income Tax Act, 1961 from ₹1 lakh to ₹1.5 lakh/

"The households are the main contributors to savings. Therefore, to encourage domestic investment in long-term savings, I propose to increase the investment limit under section 80C of the Income-tax Act from ₹1 lakh to ₹1.5 lakh."

Yes, it is relevant today but for taxpayers filing their returns under the old tax regime.

Higher home loan interest deduction

Jaitley increased the home loan interest deduction limit from ₹1.5 lakh to ₹2 lakh in case of self-occupied house.

"Housing continues to be an area of concern for middle and lower middle class due to high cost of financing. Therefore, to reduce this burden, I propose to increase the deduction limit on account of interest on loan in respect of self-occupied house property from ₹1.5 lakh to ₹2 lakh."

Yes. This rule is relevant even today but only under the old tax regime in case of self-occupied properties. In case of let-out properties, this deduction is allowed under the new tax regime as well.

Budget 2014 also proposed an additional tax incentives for new home buyers. "Our government is committed to endeavour to have housing for all by 2022. For this purpose, I intend to extend additional tax incentive on home loans to encourage people, especially the young, to own houses," Jaitley said. This incentive is, however, not available in 2026.