Newspapers, TV, Websites move into top gear covering the pre budget expectations and report all the details. Add to it all the pros and cons and my head starts spinning.
Now you’ll snigger at me and say that all this information should actually help me with making better financial decisions. But actually the poor me gets a decision paralysis with all this abundance of information.
Another thing which bugs me that people are so worried about the Government’s budget but when you ask them whether they have a personal budget of their own, they look at me as I’ve gone nuts asking that question. Personal Budgets is so boring, they cringe.
Don’t you think it’s like बेगाने की शादी में अब्दुल्लाह दीवाना
Recently I attended my cousin’s marriage. I got a few gifts as part of some rituals. Similarly the FM gave me a few IT sops. But then the FM taxes me hugely. I guess it’s similar to the amount I had to spend to attend the marriage. 
In any case it’s my cousin’s marriage and not mine!
Coming back to the budget 2009, things which impact us at a personal taxation level is as under:
Marginal Increase in Tax Exemption: Personal income tax exemption limit raised for senior citizens by Rs 15,000 and for all others by Rs 10,000.
Higher Deduction under Section 80DD: Annual deduction in respect of maintenance, including medical treatment, for a dependent with severe disability (more than 80%) has been raised to Rs 1 lakh from the current Rs 75,000.
Expanded Scope of Section 80E: Annual deduction in respect of interest on loans taken for higher education purposes has been expanded from the current limited list of courses to cover all fields of studies, including vocational studies, pursued after completion of schooling.
Elimination of Surcharge: The 10% surcharge on taxes for those earning annual income above Rs 10 lakhs will no longer exist. This will lead to a tax saving for higher income earners.
Abolishment of Fringe Benefit Tax (FBT): FBT on the value of fringe benefits provided by employers to employees has been abolished.
Increase in Wealth Tax Exemption: The exemption limit for wealth tax has been increased from Rs 15 lakhs to Rs 30 lakhs.
Automation of Tax Filing Procedure: Reiteration of the re-engineering of the key business processes around the filing of direct taxes.
To be fair, Union Budgets are an important policy document for the country and which means a lot of things to a lot of people. Every industry looks forward for incentives, schemes and fair taxation laws.
My own interest area is the Infrastructure Sector, Education and the Fiscal policies of the country.
It’s a matter of concern that the fiscal deficit budgeted is 6.82%. Specially when we recollect that the FRBM Act, 2003 mandates the Central Government to eliminate revenue deficit by March, 2009 and to reduce fiscal deficit to an amount equivalent to 3 per cent of GDP by March,2008.
For budget insights check out Ajay Shah’s Blog and TT Ram Mohan’s The Big Picture
You can also download BUDGET09 which gives a snapshot idea of the impact of budget on various industries.
Do read and understand the Union Budget for sure. But do remember to do your own personal budget too. :)
However it still remains a mystery as how less we know about personal finance. The only solution is to share whatever useful stuff you find.
Some readers have come back to me saying that I should facilitate easy sharing of my content. So go ahead share it with your friends and family
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Hi,
It is so important to have a personal budget. I just started earning a few months back, and I had no idea where I was spending and how much to allocate for various things. Finally I just created an excel for expenses and tax savings and investments. I get amazed how people manage without a budget. I received a mail about our new tax structure and as per that even the percentage limits had changed. For eg. 1.9lakhs-3lakhs is 10% tax is this correct?
MS Excel is a great way to track your money. We are building a software on Java that will help you track your income, expenses, portfolio, alerts, etc. It’ll be called “Rupee Manager”. It will also have a Financial Health Check feature.
The %ages have not really changed. But the exemption limit has increased. So the 10% tax rate for the income bracket mentioned is right.