Salaried professionals: A male earning up to Rs 5 lakh a year will save Rs 44,000 by way of income tax. Now, he will pay only Rs 55,000 by way of income tax, which means that the effective tax rate is down to only 11 per cent. That means more money of up to Rs 44,000 per annum is available for investment.
For women, the difference is Rs 43,500 per annum. For senior citizens it is up to Rs 39,500 per annum. That will be a great saving for working professionals.
Also, if you buy medical insurance for your parents, you get an additional relief of Rs 15,000.
Short term capital tax: People will be forced to hold on to their shares for at least a year because short term capital gain has become 15 per cent. That is a positive disincentive to sell within in one year. If there is less selling pressure, the stock market will be forced to improve.
Stock market advice: One thing bothering everyone is this Rs 60,000 crore that will cost the exchequer. If banks are not reimbursed by the Finance Minister, than they (the banks) will take a hit and therefore banking stocks may fall. We have to wait and watch.
Wait and watch. Ultimately the stock markets will be driven by global trends. If markets fall in US, Asia etc, it will affect us. Investors must be cautious.
Senior citizens: Reverse mortgage loan scheme -- if you have a house, you can give your house (mortgage your house to the bank while still living in it) and take a loan. The money you receive will not be taxable. It can become your regular income.
Consumers gain: Two-wheelers, small cars, tea and coffee and other small things, will get cheaper.
Last words: No googlys! But I did not expect him to give so much relief on the personal income tax. It was a substantial relief to the middle class, to both the self-employed and to professionals.
Source : MoneyControl