Budget 2009 – What it means for you?

Yogi — Sat, 29 Aug 2009 16:20:00 GMT

Now that the dust has settled down, let’s look at what the Budget 2009 means to you and me as tax payers.

The tax slabs for the basic exemption limits has been increased as follows:
1. Senior Citizens – Income upto Rs.240,000 exmpt from tax (earlier limit Rs.225,000)
2. Women – Income upto Rs.190,000 exempt from tax (earlier limit Rs.180,000)
3. Other Individuals – Income upto Rs.160,000 exempt from tax ( earlier limit Rs.150,000)

Surcharge on the personal income tax at the rate of 10% which was charged on oncome of Rs.10 lakhs and above has been abolished completely.

While the slab increase will help the tax payer only marginally, it is the individuals in the higher income segment who will benefit by the abolishment of the surcharge since the effective maximum marginal tax rate comes down from 33.99% to 30.90%.

The exemption limit for payment of wealth tax has now been increased to Rs.30 lakhs from the earlier Rs.15 lakhs and this is applicable from AY 2010-11 i.e. from 31^st March, 2010.

Section 80E covering exemptions against education loans for higher studies in engineering or medicine or management has been broadened to include loans taken for almost all fields of studies including vocational studies pursued after completion of schooling.

Section 80DD covering deductions against maintenance and medical treatment of a disabled dependent has been increased from Rs.75,000 to Rs.100,000 (The limit for ordinary disability i.e., disability which is not severe remains same at Rs.50,000).

The infamous FBT or Fringe Benefit Tax has been scrapped. Thereby implying that the burden of tax on re-imbursements, allowances and perquisites received by an employee has to be borne by the employee himself – back to the good old days!

Effective from October 1, 2009 every gift of immovable property or movable property (shares and securities, jewellery, archaeological collection, or works of art such as paintings and sculptures) from non-relatives is taxable in the hands of recipient / donee if the value of gift exceeds Rs.50,000. Earlier, cash gifts within Rs.50,000 in all from non relatives and gifts in kind irrespective of value from non relatives were exempt from tax.

Filing of tax returns to be simplified by reintroducing SARAL 2 income tax forms.

Threshold limit for payment of advance tax as per section 208 of IT Act has been enhanced from the present Rs.5,000 to Rs.10,000.

This article is written for InvestmentYogi by Lovaii Navlakhi, IMM.

Investing It! : reimbursements, exemption limit, vocational studies, jewellery, securities, recipient, surcharge, sculpture

Budget 2009 – What it means for you?