For the actual event we need to wait till the first week of July 09 and the wishes are innumerable for a few columns of print, though we have attempted to present a handful in one of the earlier posts. In this post we take a look at what the industry and experts have to say regarding what can be expected out of the upcoming budgetary speech in the first week of July 09 from the perspective of personal finance.
There are wishes and there are expectations and then there are events. For the actual event we need to wait till the first week of July 09 and the wishes are innumerable for a few columns of print, though we have attempted to present a handful in one of the earlier posts. In this post we take a look at what the industry and experts have to say regarding what can be expected out of the upcoming budgetary speech in the first week of July 09 from the perspective of personal finance.
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Personal Income Tax
Changes are expected to increase the minimum slab for income tax charges. Rs. 2.5 L seems to be the figure in the minds of the decision makers. Also the tax benefit from Section 80C investments may be increased to Rs. 2 L from the present Rs.1 L . An infrastructure supporting investment may be part of this 2 L limit.
The Pension Development and Regulatory is also lobbying to get tax benefits for investment in the New Pension Plan.
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Insurance Sector
The IRDA is aggressive in its reforms process by itself. It has recently passed regulations to make sales persons support the customers throughout the term of the insurance plan by linking their long term commissions to the services offered.
As such the budget may only have to talk about increasing the investment limits of the foreign partners. Are there talks of LIC going public soon? Now, that can be a big step in a positive direction in this budget, as implementation could take a couple of years.
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Savings Schemes
Typical Government sponsored savings schemes are the EPF and Postal Savings. Both these need changes. EPF has fixed this year’s rate at 8.5%. EPF office has said that all their reserves have been exhausted and hence cannot increase their payout rates. Postal savings had been at 8.5% for a long time now (Investment doubling in 8 years and 6 months). Their investment portfolio and management has always been a mystery.
Transparency is the need of the hour as well as there needs to be a conscious avoidance of recurrence of anything like the US64 Scheme of the erstwhile Unit Trust of India. This situation has been avoided in the NPS, it being a Unit Based Scheme. It is probably the right time now, in a down turn, to make these corpuses open to transparent & professional management.