Find out all about the budget and how it affects your pocket, that too, minus the jargon. Get tips from experts on what you can do now. Also meet people like you and find out what they think about the budget. Here's what was in the budget for Sandeep Shah, a small businessman.
Name: Sandeep Shah Age: 26 Industry: SME/Manufacturing Income: Rs 300,000 pa (gross) Tax: Rs 40,000 pa Investments: Rs 50,000 in Insurance, Rs 70,000 in mutual funds and Rs 80,000 in fixed deposits. (Cumulative amount) Debts: Car loan, EMI of Rs 9000 Loan amount: Rs 2 lakh over 3 years
What happened in the budget for him?
The measure: Banking cash transaction tax withdrawn
The impact: Till now, a tax of 0.1% was levied on any withdrawal over a specified limit from the current account. This limit was Rs 25,000 for individuals and Hindu Undivided Families and Rs 1 lakh for others. Small businessmen with frequent withdrawals from their current account can now breathe easy.
The measure: Central Value Added Tax (CENVAT) on all goods reduced from 16% to 14%
The impact: For manufacturers of CENVAT-able goods, this comes as a boon as it will reduce cost to the consumer and hopefully push sales.
The measure: Customs duty on project imports reduced.
The impact: For specific project imports, the small businessman can now get benefits of lower cost.
The measure: Firms with income less than Rs 10 lakh exempt from service tax.
The impact: Earlier, the limit for exemption was Rs 8 lakh. This has gone up, thus giving relief to small businesses that come under the wider slab.
The measure: As far as his individual income is concerned, tax slabs have changed for the better. Here are the new tax slabs for men:
Slab
Tax rate
0 to Rs 1.5 lakh
0%
Rs 1.5 lakh to Rs 3 lakh
10%
Rs 3 lakh to Rs 5 lakh
20%
Above Rs 5 lakh
30%
However, surcharge and education cess remain the same.
The impact:
Taxable income (Rs)
Tax before budget (Rs)
Tax after budget (Rs)
More money in your hands (Rs)
200,000
14,420
5,150
9,270
500,000
101,970
56,650
45,320
1,000,000
256,470
211,150
45,320
1,200,000
350,097
300,245
49,852
1,500,000
452,067
402,215
49,852
2,000,000
622,017
572,165
49,852
2,500,000
791,967
742,115
49,852
4,000,000
1,301,817
1,251,965
49,852
What should he do now to plan his money better?
- As far as his personal income tax is concerned, he will now have more money to save and spend. He can use this surplus to invest his money smartly.
