Does the Budget boost your bottomline?
You don't need to file tax returns just because you have a cell, or went to the US to be with your NRI son.
By TNN |
One-by-six scheme abolished:
If you don't have a taxable income, you don't need to file returns just because you have a cell, or went to the US to be with your NRI son.
Tax deduction:
Bank fixed deposits of 5 years or more will now be eligible for computing deduction up to a limit of Rs 1 lakh under Sec 80C; Rs 10,000 cap on pension schemes under Sec 80CCC abolished. Ergo, you can now save tax for investments up to Rs 1 lakh in long-term FDs or pension schemes, not just through insurance policies, EPF or PPF.
No FBT:
No FBT on superannuation benefits up to Rs 1 lakh; your employer can give you such a benefit without having to pay tax and with the Rs 1 lakh under Sec 80C you could save, tax free, as much as Rs 2 lakh a year for your retirement.
Service tax:
Service tax rate up from 10% to 12%, coverage expanded; your bills for telephones, debit and charge cards, eating out and cable TV will go up. Also, using the ATMor flying abroad business class or taking a cruise will now mean paying a hefty tax.
Extra duty:
Peak customs duty down, but 4% additional duty on all imports, that can be set off against excise; since imported finished goods, including cars, will attract the extra duty but have nothing to set off against, they'll be costlier.
Auto:
Automakers have already announced price cuts following excise reduction. Models which will cost Rs 2,000 to as much as Rs 25,000 less:Maruti 800, Alto, Zen, Wagon R, Santro, Omni, Indica Diesel, Honda City and Accord, and Chevrolet Optra (although the last three are not small cars).
Cigarettes costly:
Excise duty hikes will bite cigarettes, set top boxes, packaged software, mosaic tiles, glassware, wood articles, goggles, umbrellas and fur skin.
Stock investment dearer:
Securities transaction tax upped by 25%; also service tax imposed on share transfer agents. It'll cost you a little more to invest in stockmarkets.
MF scene:
Close-ended equity MFs treated on par with open-ended ones for dividend distribution, but definition of equity MF changed. Your returns from close-ended equity MFs will not attract tax on dividends, but an MF must hold at least 65% in equity against 50%earlier to qualify as an equity fund.
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