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Rajeswari Sarkar (25) is an IT professional working in Chennai. While she is not against taxes, she wants services and infrastructure to improve. Considering the grid failure last year, she is looking forward to restructured policies in the coal and power sectors. Personally, while she wants the tax exemption slab on basic income to be widened, she wants laws to be enforced to penalise those who evade taxes. Besides the hike in fuel prices, rising plane fares is an area of concern.
Budget reaction: The FM has not provided any incentive to taxpayers to increase savings. The Rs 2,000 credit benefit for the Rs 2-5 lakh slab is negligible. The higher allocation in social sector spending is welcome as also the fund for women’s safety. Eating out will become expensive. Higher mobile phone prices are a damper.
Aabir Bose (26) works with an IT firm in Calcutta. He invests in LIC, PPF, fixed deposits in banks and equity linked growth plans to save tax. With inflation at an all time high, too little is left to save, he says. Abir feels only people earning more than Rs 3 lakh a year should be taxed. The lock in period for fixed deposits in banks should be reduced to 2-3 years, he says. Tax saving infrastructure bonds should be re-introduced. The growth forecast is uninspiring and hence the government must encourage more investment.
Budget reaction: It is a balanced budget and many of my expectations are met. The increase in permissible premium rate to 15 per cent on life insurance policies is welcome. The low KYC requirement on insurance policies is also helpful. Also the decision to float more tax free bonds is welcome.
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Shyamalendu Chakrabartty (71) retired as deputy director of the state language department of Bihar in 2000. Wife Sudipta is a home-maker. Chakrabartty feels medical expenses are a retired person’s greatest worry. On an average, a person spends Rs 2,000 a month on medical expenses, while the reimbursement for retired government servants is insignificant. Even if proper medical cover is not provided, he feels, at least the medical expenses incurred in a year should be exempt from tax. Moreover, lack of incentives such as very low interest rates on post office monthly income schemes have doomed small savings and largely infrastructure development, a sector he feels needs immediate attention. He would also like to see only annual income above Rs 2.5 lakh taxed.
Budget reaction: The budget is not up to my expectations. There is nothing much for senior citizens. But, in the context of the economy, the finance minister has not done a bad job. While tax benefit of Rs 2000 is a token amount, the introduction of surcharge on super rich will increase the tax base.
Dr Rahul Sen (50) is a consultant gynaecologist and an author-publisher in Calcutta. He feels the slab of Rs 1 lakh under 80C should be raised further. In view of increasing corporatisation and inclusion of high-end technology in health care, Rs 15000 under 80D is an insignificant relief. The high health insurance premium of the elderly and the rising inflation mean less purchasing power for seniors.
Budget reaction: The budget is good but not excellent. There is no drastic change keeping in mind the upcoming election. The tax slabs are same which is good. As a doctor, I am happy that cigarettes would be costlier. The budget is also good on the investment front. The liberalisation of RGESS is welcome
Raja (40) & Arunima (35) Guha both work for multinationals in Calcutta. Raja looks after business development, while Arunima is a management consultant. Their daughter Aaratrika will join school soon. Raja feels the budget should please the salaried, offer incentive to manufacturing, farm, infrastructure and health. He wants salaries above Rs 3.5 lakh to be taxed and the savings limit raised to Rs 1.5 lakh. People earning above Rs 30 lakh should fall in the 30 per cent tax bracket. Subsidies on LPG can be linked to the tax bracket. Arunima wants to see more allocation for women and children. The tax savings limit should be Rs 2 lakh without PF and home loan principal.
Budget reaction: Raja feels on the tax front there is nothing outstanding. Inflation indexed bond and liberalisation of RGESS are welcome. The reduction of STT is welcome. But the definition of super rich could have been lower than Rs 1 crore. Arunima feels the budget is good. Increased allocation for women, the Nirbhaya fund and bank for women are welcome. The thrust on education is good for the development of our children.
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Rupa Das (40) works in a multinational firm in Bangalore. She has two schoolgoing kids — son Sunav (13) and daughter Sumana (3). Her investment portfolio is a mix of insurance, PPF, property and mutual fund. With women forming a significant part of the workforce today, she wants the FM to provide incentives to them in terms of tax rates and offer savings scheme with higher returns. The FM needs to mobilise large resources to offer sops to the urban middle class and the rural poor — its two main votebanks — ahead of the election next year but targeting the super-rich to do so is not advisable. The FM should also try to expand the tax net and plug the leakage in various social sector schemes.
Budget reaction: It’s a disappointing budget from the tax perspective as there’s nothing in it for the urban middle class to encourage them to save. The proposal for the all-women bank is interesting but one has to wait and watch to understand the additional benefits. The hike in outlays in social sector schemes is welcome.
Sumit Sarkar (38) is a proprietor of an advertising firm in Calcutta. Sarkar wants the government to simplify the tax structure by introduction of GST. Personally, he wants the savings limit to be raised to Rs 1.5 lakh. He wants tax savings infrastructure bonds to be re-introduced. Professionally, Sarkar wants service tax to be based on business size with rates going up with turnover.
Budget reaction: Very disappointing budget. There has been hardly any change in personal tax. The Rs 2,000 relief is not much of help in an inflationary economy. I was planning to buy a smartphone. It will now cost more. Eating out will be more expensive too. Additional benefit for home loan up to Rs 25 lakh is a good step though.
How can I save tax this year?
Section 80D
Premium paid for health insurance up to Rs 15,000 for individuals. Another Rs 15,000 is available for deduction if the premium is paid towards health insurance of parents. A deduction of Rs 5,000 for preventive health check-up.
New: Contribution to schemes of central and state government similar to CGHS exempt
Section 80CCG
New: Those earning income up to Rs 12 lakh will be eligible for deduction under RGESS. The new provision will allow exemption for not only direct investment in equity but also if the investment is made in equity MFs. The tax deduction of 50% of the amount invested, subject to a maximum of Rs 25,000, has been extended to three years instead of the current one year
Section 80C
This section allows for an overall deduction up to Rs 1 lakh
Premium for life insurance, pension plans
Contribution to a provident fund, including PPF
Repayment of home loan principal, tuition fees
Investment in ELSS of mutual funds
Deposits in NSC, SCSS, five-year term deposits of Post Office and scheduled commercial banks
For persons with disability or suffering from ailments the limit of 10% on premium paid on life insurance is increased to 15%
Section 80E
Payment of interest on higher education loan
Section 80G
Donations to specified charitable institutions allowed
Section 24
New: A first-time buyer taking loan of less than 25 lakh will get a Rs 1 lakh additional deduction of interest over Rs 1.5 lakh
Section 54E
Long-term capital gain from equity mutual funds or shares of an Indian company listed on domestic bourses is exempt from tax
Section 10
Bonus and withdrawal from life insurance products will not be tax-free if the sum assured is not 10 times the premium.
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