A quick first take on Budget 2010

By BankBazaar.com | February 26, 2010

Apart from this the finance minister has also given an additional deduction of Rs 20000 for any investments in Infrastructure bonds. This will be over and above the Rs 1 Lakh we already have. Thus meaning we could even save up to ten percent of our income in case we are in the lower end of any of the slabs by putting our money into the development of infrastructure of the country. On the paperwork front too there is some cheer as the Finance Minister has said that a two page SARAL -2 is ready and will simplify the process of filing our returns.

A first off the block take on the Union budget 2010 and we the people.

Cheer for middle and upper middle class

A majority of income tax payers in the middle class and upper middle class have a lot to cheer from the Union Budget 2010. The income tax slabs have been changed drastically.

The new slabs are as below:

People with Income up to Rs 1.6 Lakhs: Nil tax

Income between 1.6 and 5 lakh:  10 %.

(Thus anyone who is in the 3-5 lakh bracket currently will get to save around Rs 20000/- approx.)

Income between 5-8 Lakh: 20%

Thus anyone who is in the 5-8 lakh bracket now will get to save up to around Rs 30000

Above 8 Lakh: 30%

Apart from this the finance minister has also given an additional deduction of Rs 20000 for any investments in Infrastructure bonds. This will be over and above the Rs 1 Lakh we already have. Thus meaning we could even save up to ten percent of our income in case we are in the lower end of any of the slabs by putting our money into the development of infrastructure of the country.

On the paperwork front too there is some cheer as the Finance Minister has said that a two page SARAL -2 is ready and will simplify the process of filing our returns.

The limits for auditing of accounts of professionals has been raise to Rs. 15 lakhs and for companies it has been raised to Rs 60 lakh.

Not so happy news for car buyers

Car buyers who were waiting to hear some good news from the budget seem to have suffered a short term as well as long term hit from the budget

The hike in excise duty to 10% will mean a hike in the prices of cars. Especially large cars and SUV’s. This is the “capital” hit that prospective car buyers will take.

Even if they are able to buy the car they will have to spend more as the prices of Diesel and Petrol are set to rise by at least Rupees 2 per litre.

Gold lovers saddened

The Finance minister has suggested a hike in the duty charged on Gold and Silver imports. Prices of gold are set to increase as the budget has proposed a Rs 10 per gram hike in the indexation of Gold and Platinum. This could see a price change especially in the prices of branded jewellery.

More banks coming our way:

The Reserve bank of India is set to dole out additional banking licenses to private sector players as well as Non banking financial companies. More bank branches, more ATM’s, better services and more products could be coming our way soon.

Huge impetus on Infrastructure

There is a large focus give to developing infrastructure in the country. Over 40% of the total outlay has been given towards developing infrastructure. This added with the deduction to investments in Infrastructure bonds will surely help us see better infrastructure in the coming years.

Contribution to CGHS

Apart from the deductions we are currently eligible for investing in health insurance schemes, the finance minister has suggested that citizens can now also avail the same benefits for investing in the Central Government Health Scheme.

Service Tax unchanged:

With a keen focus on the GST, the service tax rates have been retained at 10%. Thus prices in the service sector do not seem to be facing any hike.

The above is a short preview of budget 2010. Keep watching this space for For more in-depth reviews as they unfold

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