Skip to main content

Union Budget 2010 - Tax Cut, More Money To Invest

   This budget came as a pleasant surprise for the middle income taxpayer. The Finance Minister has increased the income tax slabs. He has changed the tax slabs for men, women and senior citizens. The consumer, already burdened by spiraling prices, will welcome these changes in the tax structure with open arms. However, with the introduction of sweeping changes in the taxation methodology on April 1, 2011 via the Direct Tax Code, this happiness could be a limited one.

Changes in tax slabs    

The highest tax slab has been increased from Rs 5 lakhs to Rs 8 lakhs, providing a tax relief of Rs 20,000 to Rs 50,000 for the taxpayers.

Additional deduction under Section 80C    

The Finance Minister has also increased the limit of deduction available under Section 80C. He has allowed an additional investment of Rs 20,000 in infrastructure bonds taking the total limit under Section 80C from the current Rs 1 lakh to Rs 1.2 lakhs.


   Besides investments in Employee Provident Fund and principal of home loan, there are a large number of instruments like post office saving schemes and equitylinked savings schemes where you can invest to claim deductions. By this provision, the government has enabled investors to invest in debt instruments issued by entities controlled by the government.


   This will help increase the national savings rate. The Economic Survey issued last week had observed that the gross domestic savings stood at 32.5 percent of the GDP in 2008-09, while the gross domestic capital formation (investments) was 34.9 percent. The rates of domestic savings and investments are now on par with the world's fastest growing economies.


   Through this provision the Finance Minister has put more money in the hands of the middle income segment, raised domestic money for the very important infrastructure sector, and reduced the dependence on external funding for infrastructure.

Towards simplification of taxes    

The Finance Minister has emphasised on the long-term road map of simplification of direct tax laws. This year's budget introduces a two-page Saral-2 returns form for individual salaried assessees, working towards a simpler tax process. Further, the budget emphasised again on the need to implement the Direct Tax Code on April 1 next year. So, next year onwards all incomes whether it is salary, longterm capital gains or short term gains will be taxed at a uniform tax rate.


   Further, under the EET (exempt, exempt, tax philosophy), investors have to get used to paying tax on all types of gains from investments whether received every year regularly or at the time of redemption. Meanwhile, for this year alone, investor tax-payers can enjoy the double benefits of lower taxation and exemptions on gains from investments.

Investment strategy    

The stock markets that were very worried before the budget welcomed the provisions by trending upwards. Individual investors can now renew focus of their investment strategy towards equities. With the promise of fiscal discipline and an indirect stimulus of tax savings the growth trajectory is now on a firm path.


   Barring any international hiccups the stock markets will continue their forward march. Hence, picking up good stocks and increasing allocation to equity will work in giving good returns in 2010.

 

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

LIC Leave Encashment Plan

LIC Leave Encashment Plan       Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms fro

Tax Slabs 2012

Slab 1 Upto Rs 1.6 Lacs Tax Rate NIL for Men; Upto Rs 1.9 Lacs Tax Rate NIL for Women; Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen; Slab 2 Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10% Slab 3 Rs 5 Lacs to Rs 8 Lacs Tax Rate 20% Slab 4 Rs 8 Lacs onwards Tax Rate 30%   --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 R

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage

What is price deflator?

What is price deflator? A defaltor is used to restate data measured over time to prices prevailing at a particular period or time to make it comparable. Essentially, a deflator removes the effect of inflation from the data. What is the role of price deflator in GDP calculations? Prices are continuously in a state of flux, but generally trend upwards over time. Therefore, even without an increase in the quantity of goods and services produced by an economy, price increase can give the impression of an increase in the gross domestic product, or GDP, the benchmark indicator of economic activity. Therefore, the impact of prices has to be removed at arrive at a true measure of the value of goods and services produced, or real economic growth. A deflator is used to reduce output estimates at current prices to what they would be if calculated with reference to prices in a particular year. Why is GDP deflator considered a good measure of inflation? The ratio between the GDP at current p
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now