Mar 19, 2012, 11.25 AM | Source: Moneycontrol.com
FM's Budget pocket friendly for professionals Was Pranab Mukherjee's Budget enough to boost sentiment of professionals?
Professionals will be able to save a little more from now on after finance minister Pranab Mukherjee widened the income tax bracket.
He proposed a change in the minimum exemption for income tax from Rs 1,80,000 to Rs 2,00,000. While this is something that will add to the disposable income of a salaried individual, it's a far cry from the Rs 3,00,000 that was expected.
The real benefit on the tax front is for anyone who has a higher amount of income as the 20% tax slab has been increased from Rs 8 lakh to Rs 10 lakh. This not only will encourage and lead to further investments in their business but also help generate more employment.
On the other hand, an increase in indirect taxes like service tax and excise duty will have a negative impact on the professional's income. Service tax and excise duty have now gone up to 12% respectively. This will eat into a professionals earnings considerably as an increase in service tax will lead to higher expenses.
In the Budget, hike in excise duty to 12% has seen automobiles and other products including consumer durables leading to the burden being passed onto the consumer. On the whole, with excise duty going up, diesel cars, cigarettes, computers and mobile phones are all expected to get costlier now.