The Hindu Business Line : Let's walk the Budget

IN THE next seven months, you may have to spend at least 2 per cent more on whatever you buy, be it a car, a bottle of sauce or that fancy imported DVD. Your take-home salary has just reduced a bit more due to the new "cess" of 2 per cent.

If you are earning slightly less than Rs 1 lakh and are expecting a promotion or a pay hike, pray you don't get it.

This is because if your taxable income is below Rs 1 lakh you don't pay any tax, and also you save on the existing tax of Rs 1,000-9,000 depending on your income. But if your taxable income edges up to even Rs 1,01,000, you have to cough up Rs 9,200 to the exchequer. Thus, those on the borderline will feel the pinch more. Strange.

There are a few sops for specific target groups, such as senior citizens, disabled people and families of soldiers killed in action. Here are a few that might be of relevance to you.

Senior citizens

If you were not happy with the Varishta Bima Pension Yojana, don't worry. You have one more high-interest scheme on the cards. You can invest in the 9 per cent interest bond which will be launched shortly.

The structure of the new scheme is not yet available. But there are enough indications that the Varishta Scheme will be done away with. Interest rates on small-savings schemes remain unchanged, giving enough avenues for assured return investments.

Students

If you are aspiring for higher education, obtaining loans has become that much more easier.

You no longer have to offer a collateral for loans up to Rs 7.5 lakh. A guarantee will do.

Disabled

The deduction given for disabled persons would now be extended to persons suffering from autism, cerebral palsy and multiple disability. The Railway Budget also provides for a 50 per cent fare concessions in the first and second sleeper classes and on season tickets for these persons.

Patients suffering from haemophilia will get a 75 per cent concession across all classes except First-AC, if travelling for treatment.

Saluting the jawan

Family members of Defence personnel killed in action will now get tax-free family pension.

War widows travelling in second or sleeper classes also get a 75 per cent concession on fares.

Service tax

Each time you book your ticket through a travel agent, opt for a package tour, book a shamiana for a party or even catering services, you may have to shell out a bit more. Each of these services will now attract a service tax of 10 per cent.

All your banking services such as issuing a pay order, demand draft, cheque, letter of credit, providing bank guarantee, safe deposit, lockers, safe vaults or operation of bank accounts too will now be taxed and an additional cess will be levied.

Others

If you are travelling to attend an interview for a Central Government job, you do not have to pay for your train ticket.

Acquisition of immovable property other than agricultural land will be taxed at a flat 10 per cent of the compensation received.

If you receive a gift of more than Rs 25,000 from an unrelated person, it will be taxed. There are, however, exemptions for gifts received on your wedding or from blood relations.

Interest earned on non-resident deposits will now attract tax. Any interest paid on foreign currency deposits too will be taxed.

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