While the tax rates have remained unchanged, rationalisation of the FBT could have positively impacted the net take-home of the salaried class, particularly those enjoying conveyance allowance and superannuation benefits.
Annual superannuation contributions by employers up to Rs100,000 per employee are now not subject to FBT. Indirectly, this is a respite for employees entitled to such benefits. Last year, FBT was introduced on superannuation contributions with no exemption, which forced companies to evaluate whether they at all wanted to continue with such schemes.
Further, the finance minister has not made any amendments to move towards an EET regime for the present. This is a big respite for individual taxpayers.
Consumer Items As a consumer, the following became cheaper for you:
Edible oil to decrease by 6 per cent
Condensed milk to decrease by 10 per cent
Mineral water to decrease by 8 per cent
Tea to cost Re1 per kg less
MP3 players to reduce by 5 per cent
Biscuits to decrease by 5 per cent
Packed foods to cost 6 per cent less
Soft drinks to cost 4 per cent less
Small cars to cost 8 per cent less
And the following became expensive:
Cigarettes to be 5 per cent more costly
Computers to cost 8 per cent more
Increase in service tax rate to impact household savings
Investments Long term capital gains on equity shares are still exempt. However STT rates have been increased by 25 per cent. The new STT Rates are as under:
Taxable Securities Transaction
Delivery based trades
Both purchaser & seller
Both purchaser & seller
Units of an equity oriented mutual fund to the mutual fund
Investments in fixed deposits in scheduled banks for a term of five years or more are now eligible for a deduction (up to the overall limit of Rs100,000) under section 80C.
Investments in specified pension funds under section 80CCC are now entitled to deduction up to Rs1,00,000 (against Rs10,000 last year). But the overall cap on total deduction up to Rs100,000 for investments in instruments under section 80C along with section 80CCC has been kept intact.
Tax return filing The one-by-six scheme has been abolished, which means that persons without a taxable income who were earlier required to file tax returns under the scheme, will not be required to do so now. The government also proposes to introduce the 'Tax Returns Preparers' scheme, which should simplify tax filing for individuals.