The source of income and expenditure of government has a considerable impact on the living standard of a common man. Let’s analyze how this interim budget of the Modi Government is going to make our life easier or busier:
Some steps of the Government, which makes the life easy and increase in purchasing power also:
For Salaried Class:
No Tax up-to income of Rs. 5, 00,000/- without changing the existing tax slab
What does it mean?
The government has taken a very smart and tricky move. The budget has offered a full tax rebate on taxable income up to Rs 5 lakh. This is different from saying that those earning up to Rs 5 lakh are exempted from tax. So individuals whose income falling between Rs 2.5 lakh-Rs 5 lakh will still technically be taxed at the regular rate of 5 percent, but the amount will be deductible as a rebate while filing tax returns.
The government could have given a straight exemption, but the Government move for rebate rather than the straight exemption is to pass benefit only to low and middle-income people without losing the tax from the higher income individuals who have net income more than Rs. 500,000. Higher income people will keep paying tax as per the existing slab.
It means you are going to spend or invest your tax saving of Rs. Up to Rs. 12,500 only if your net income is up to Rs. 5,00,000, hence your purchasing power will increase up to Rs. 12500 and increase in standard deduction will also be going to increase your purchasing power up to some extent. Good Move, increase the purchasing power, make life easier.
Lower Business Class:
They are also going to use GST collected amount for three months because Budget allows the business owner having the turnover of Rs. 5,00,00,000 to pay GST on a quarterly basis, that will improve cash follow to make the life easier.
Holding two residential houses or planning to buy a second home, Good News for you:
If you have two homes, you were earlier required to pay tax on the notional rent from the property, even if you had not actually leased it out. You now do not have to pay those taxes on notional rent. The people who were avoiding to buy a second home because of the tax on notional income would get motivated to buy a second new home and saving of notional tax would improve saving also. Make life easier
Are you planning to sell your property? Good news for you also:
For individuals planning to sell their property, if you have long-term capital gains from the sale of property of up to Rs 2 crore, then this budget allowed you a one-time opportunity to utilize the amount to purchase or construct two residential houses in India instead of one residential house as allowed earlier. This will be permitted only once in a life. Now you can plan to sell, save tax and invest. Make the life easy and save tax.
Some steps of Government which do not provide any saving but makes life easier:
No need to file an income tax return only to take the refund of tax deducted at source on interest income by the bank:
Earlier, a bank was liable to deduct TDS on interest Income of individual if that income was more than Rs. 10000. People who have no income except this interest income were supposed to file the income tax return to get the refund only. Now, this limit has been increased to Rs. 40000 from Rs. 10000/-. Not only this but also TDS limit on rental income has moved up from Rs 1.8 lakh to Rs 2.4 lakh. This means less administrative pain in chasing refunds, make the life easy.
It is also planned in the budget that income tax return will be processed within 24 hours. “Matlab Aaj return file Karo Kal Refund app key account me” make the life easy
No need for chess income tax office, only online interactions between taxpayers and tax authorities over the next two years has been planned.
Government efforts to keep the fiscal deficit up to 3.4 % and planned to bring it up to 2.5 % of GDP as result control on inflation will help us to control expenses as a result increase in saving. Make life easier.
CS Ravi Bhushan Kumar
Practicing Company Secretary