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Budget 2014 :What’s In It For You

Here are the highlights of Mr Arun Jaitley’s first budget. Our Gruhinis’ expected cheaper petrol, safe housing projects for women, school fee concession and lower duty on hospital equipments. Lets see how many of them have been met.

For Your Investments :More avenues 

1. Kisan Vikas Patras: Remember you got them as a gift from your grandfather. It used to double your money in about 8 years. It was discontinued few years ago. It will be available for investing once again.

2. Process of investing  to be easier: Today if you invest in a mutual fund or open a trading account or invest in a insurance scheme, you need to give a separate identity, a separate address proof etc as a part of Know Your Customer (KYC) to all three entities (broker, fund and insurance). In future, one KYC documentation will be sufficient proof to invest in others. There will be common demat account for all financial investments.

 3. Public Provident Fund: If this is the place where all of your Section 80 C investments go, then be ready to park Rs 50,000 more. The overall investment limit for tax saving under Section 80C has gone up from Rs 1 lakh to Rs 1.50 lakh. Increase in this limit means that your net taxable income will also come down.

For Your Taxes : Pay less of it

1. Income Tax Limit: Its raised from Rs 2 lakh to Rs 2.5 lakh: You start paying a tax on this amount (Total Net Taxable Income (minus) -Rs 2,50000). So if your net taxable income (after 80C deductions) is lets say Rs 10,20,3000 (Rs 10.20 lakh), your total tax liability (including 3% education cess) will come down from Rs 1,40,172 to Rs 1,35,022,  a saving of Rs 5150.

For senior citizens (below 80 years), the basic exemption limit is raised from Rs 2.5 lakh to Rs 3 lakh.

2. Home Loan Benefits: The interest component of the home loan will now get a deduction of Rs 2 lakh, up from Rs 1.50 lakh. So if bulk of your salary goes in home loan principal and interest repayment, your Section 80C requirement will be taken care of.

3. Tax on debt funds (funds that invest in fixed income bearing bonds): The long term capital gains tax has been increased from 10% to 20%. These funds will now have to be held by an investor for 36 months instead of 12 months, in order to qualify as a long term capital gain.

For Your Spending: Spend in a healthy way!

1. What becomes cheaper: The things we love: footwear, televisions sets. The excise duty on footwear in the price range of Rs 500 to Rs 1000 has been halved from 12% to 6%.

2. What becomes expensive: Cigarettes and pan masala. The aerated drinks containing sugar will attract extra 5% excise duty. Calling a radio taxi may also become expensive due to a levy of service tax.

For My Gruhinis: More funds and schemes for safety 

This Budget speech mentioned girl and women 15 times. Atleast Rs 200 crore will be kept aside for safety and other development schemes for women and girl child.

Beti Bachao, Beti PadhaoYojana: Will spend Rs 100 crore to create more awareness and efficient delivery of welfare schemes meant for women.

2. Safety on roads for women: Will spend Rs 150 crore for a pilot scheme to ensure women safety in public transport and Rs 50 crore to increase safety in bigger cities.

3. Gender mainstreaming lessons in classroom: School text books to have lessons on gender sensitization

4 Saving instruments: “A special small savings instrument to cater to the requirements of educating and marriage of the girl child

Have we missed out anything that affects you? Please do write to us at thegreatgruhini@gmail.com







About Rachna Monga Koppikar

Rachna aka your Great Gruhini is a finance writer with over a decade's experience in writing about personal finance matters with leading financial publications of India. As she studies to be a certified financial planner, she is also on a mission to make every woman a money savvy individual. So shed your inhibitions. Get over your money worries with The Great Gruhini. Write to her at thegreatgruhini@gmail.com

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