Budget 2012 - impact on individuals & salaried class

It was exactly a year before that I posted my last post on leadership (in Cricket). Today, a history was created in Cricket. Yes, Sachin finally scored his 100th CENTURY!

Congrats Sachin!

Sachin's long awaited 100th Century overshadowed the Union Budget. How was the budget? The simple dipstick is the Sensex. Market was positive till the budget was presented and went down to close 210 points lower!

It shows that market is not happy about the budget.

Let us see what is in store for the salaried class and individuals:

Tax rate                             Current                         Proposed                 

Basic exemption                      180,000                      200,000

10%                                180,001 - 500,000      200,001 - 500,000

20%                                500,001 - 800,000     500,001 - 1,000,000

30%                                800,001 & above      1,000,001 & above

No special concession for women. The basic exemption stands revised to Rs.200,000 (from the current Rs.190,000).

For the Senior Citizen (60-80 yrs) & Very Senior Citizen (80+ yrs) - No change in the basic exemption

Senior Citizen - Proposed tax rates

Upto Rs.250,000 - Nil

250,001 -   500,000  - 10%

500,001 - 1,000,000 - 20% (current : 500,001 - 800,000)

Above 1,000,000      - 30% (current : 800,001 & above)

Very Senior Citizen - Proposed tax rates

Upto Rs.500,000      - Nil

500,001 - 1,000,000 - 20% (current : 500,001 - 800,000)

Above 1,000,000      - 30% (current : 800,001 & above)
The Finance Minister could have done more, but UPA needing support from others forced them to do a moderate budget.

Few benefits for an individual:

• Proposal to allow a deduction of upto Rs.10,000 for interest from savings bank accounts (earlier section 80L deduction brought back)
• Proposal to allow deduction of upto Rs.5,000 for preventive health check up.
• Senior citizens not having income from business proposed to be exempted from payment of advance tax.

Need to go through the fine prints to understand the conditions for availing the benefits.

Expect the service cost goes up, as the Service Tax rate has been increased from 10% to 12%. This is in line with implementing the GST. Your charges to banks, credit card companies will go up by 2%.

In a nutshell, the finance minister has given some benefit which will partly take care of the inflation.

Cheers,
Gopal

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