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Understanding what Budget 2015 holds for you

Here are few more things about what Budget holds for us. Click here to read the same

Hello Gruhinis

Our finance minister decided to give an account of government’s saving and spending on a weekend, so your Gruhini, instead of trying a new recipe in her kitchen, decided to tell you what Mr Jaitley has announced for us.

So here is quick summary of what this budget holds for you.

Remember that all these changes will be assessed for income tax purposes from April 1, 2016. This means that you can make changes in your earnings/spending starting April 1 2015 till March 31, 2016.

For Your Earnings

A. Your gross salary comes down by Rs 9,600 (in an year): This is on account of increase in transport allowance from Rs 800 per month to Rs 1600 per month.

Till now :So if your company pays you an allowance of Rs 2000 a month, Rs 800 of this was exempt and Rs 1200 was added to your salary for tax calculation.

After Budget: Now Rs 1600 per month will be exempt and only Rs 400 a month will be added to your salary.

B. Your taxable income can come down by Rs 10,000: The limit of rebate for health insurance under section 80 D has gone up from Rs 20000 to Rs 30000 in total. This is how

Till Now: Limit for individual tax payer was Rs 15000 and an additional Rs 5000 for senior citizen parents.

After Budget: Individual limit goes up to Rs 25000 and additional Rs 5000 for for policy taken for senior citizen and very senior citizen. Or if medical expenses upto Rs 30,000 incurred for very senior citizen, if there is no health insurance, is also allowed as rebate.

For your Savings

A. More incentives to save for retirement:

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Till Now: Under Section 80CCC, you got exemption of only upto Rs 1 lakh if you invested in any retirement scheme.This was part of the overall Section 80 C limit so if you invested in a pension scheme, you only had balance Rs 50000 to invest in other tax saving options.

After Budget: You can invest Rs 50000 more in pension or retirement schemes of insurance companies. You can also invest Rs 50,000 in the National Pension Scheme (NPS)

 

 

B. New ways to invest in gold: I know my Gruhinis are usually too carried away or allured by jewelers in to their deposit schemes for gold. Now government can help you show your love for gold in mainly three ways

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1. Gold monetization scheme: A deposit scheme whereby you can deposit gold and earn interest on it just like FD

2. Gold Bond Fund: A new way to invest in gold like a bond that earns interest

3. Make in India Gold Coins with Ashoka Chakras so that we dont buy vilayati gold coins

Watch out for this space for more clarity on these schemes

For Your Spending

1. Pay more for Services: Service tax rate goes up by 12.36% to 14%. Pay more for mall play areas and no service tax for nature visits!

Till Now:  Services such as dining out, theatres, gym memberships were charged at 12.36%. Services such as amusement parks, bowling alleys entertainment shows were exempt from service tax

After Budget: We pay more for virtually all the services such as eating out, gym etc. Services of amusement parks theme parks will come under service tax. Services such as wildlife sanctuary, tiger reserves, museums, zoos will be exempt from service tax.

Now you see why i was trying a new recipe in the kitchen instead of ordering out!

As we read the budget document closely, we will keep updating this post. Meanwhile for a detailed reading of budget fine print, we recommend you to read taxguru.in 

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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