1. Any changes in personal taxation and tax-saving investments in the annual union budget are important for financial planning every year, especially for taxpayers.
2. While investment continuity is a "given", ignoring "taxation clauses" in a budget is not being "financially savvy" towards the hard-earned money which is put to work for the entire year, as it will have a long-term impact on wealth creation, especially during the earning years.
3. In fact, optimal utilization of all budgetary provisions, which effect an investor's pocket in any manner, is vital for his corpus to remain a healthy inflation-beating one at all times.
4. A "budget-savvy" salaried person can also maximize his carry-home pay, thereby save more, and thus invest more for his future goals and retirement, instead of "ignoring" annual tax changes.
5. In FY'18-19 budget, to recap, following deserved attention:-
a) Hike in income tax cess from 3% to 4%,
b) Reintroduction of Standard Deduction as 40,000 in lieu of medical reimbursement and transport allowance,
c) EPF cap of 8% for new women workers,
d) 10% tax on LTCG above 1 lakh with no indexation benefit,
e) only 5% tax difference between LTCG & STCG,
f) Hike in Sec 80D limit for senior citizens,
g) Hike in FD/RD/Savings interest exemption for senior citizens,
h) 10% DDT on Equity MFs as TDS,
i) Hike in PMVVY limit to 15 lakhs, and
j) Sec 87A tax credit of upto 2,500 if taxable income is upto 3.5 lakhs.
6. In FY'19-20 interim budget, following deserve attention:-
a) Standard Deduction raised from 40,000 to 50,000,
b) Nil TDS on bank interest raised from 10,000 to 40,000,
c) Nil TDS on rental income raised from 1.8 lakh to 2.4 lakh,
d) Sec 54 exemption on once-in-a-lifetime purchase of two houses, if capital gain is upto 2 crore,
e) Exemption of two houses, instead of one earlier, as self-occupied for calculation of notional rental income,
f) Deduction on Home loan interest expenses extended to two self-occupied houses, instead of one earlier, upto 2 lakh, and
g) Sec 87A tax credit raised from 2,500 to 12,500 if taxable income is upto 5 lakh.
7. Even if tax benefits may seem small at times, they save our hard-earned money, and investing today's "water drops" will create tomorrow's "dams".
2. While investment continuity is a "given", ignoring "taxation clauses" in a budget is not being "financially savvy" towards the hard-earned money which is put to work for the entire year, as it will have a long-term impact on wealth creation, especially during the earning years.
3. In fact, optimal utilization of all budgetary provisions, which effect an investor's pocket in any manner, is vital for his corpus to remain a healthy inflation-beating one at all times.
4. A "budget-savvy" salaried person can also maximize his carry-home pay, thereby save more, and thus invest more for his future goals and retirement, instead of "ignoring" annual tax changes.
5. In FY'18-19 budget, to recap, following deserved attention:-
a) Hike in income tax cess from 3% to 4%,
b) Reintroduction of Standard Deduction as 40,000 in lieu of medical reimbursement and transport allowance,
c) EPF cap of 8% for new women workers,
d) 10% tax on LTCG above 1 lakh with no indexation benefit,
e) only 5% tax difference between LTCG & STCG,
f) Hike in Sec 80D limit for senior citizens,
g) Hike in FD/RD/Savings interest exemption for senior citizens,
h) 10% DDT on Equity MFs as TDS,
i) Hike in PMVVY limit to 15 lakhs, and
j) Sec 87A tax credit of upto 2,500 if taxable income is upto 3.5 lakhs.
6. In FY'19-20 interim budget, following deserve attention:-
a) Standard Deduction raised from 40,000 to 50,000,
b) Nil TDS on bank interest raised from 10,000 to 40,000,
c) Nil TDS on rental income raised from 1.8 lakh to 2.4 lakh,
d) Sec 54 exemption on once-in-a-lifetime purchase of two houses, if capital gain is upto 2 crore,
e) Exemption of two houses, instead of one earlier, as self-occupied for calculation of notional rental income,
f) Deduction on Home loan interest expenses extended to two self-occupied houses, instead of one earlier, upto 2 lakh, and
g) Sec 87A tax credit raised from 2,500 to 12,500 if taxable income is upto 5 lakh.
7. Even if tax benefits may seem small at times, they save our hard-earned money, and investing today's "water drops" will create tomorrow's "dams".