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'Compare the new slabs with the previous years to understand if your tax liability will increase or decrease after the Budget.'
Understanding the Union Budget may not be an easy task. But there are several announcements which directly or indirectly affect the common man, and people want to know more about it.
Here are a few tips on the key aspects they should focus on to know how this exercise will affect their finances.
"The Union Budget outlines the government's financial plans and policies for the coming fiscal year," says Amit Bansal, partner at Singhania & Co.
It provides information on the capital budget (government's capital payments and receipts) and the revenue budget (revenue expenditures and receipts).
Begin by listening to the Finance Minister's speech.
This will give you an overview of the government's economic policies and priorities.
Take note of anything you think may affect your finances.
Once the speech is over, go to the following URL: www.indiabudget.gov.in. Download the FM's speech. It has two parts: A and B.
Part A focuses on the macroeconomic aspects. It provides an overview of the economy and includes Budget estimates for various expenditure items in the upcoming financial year.
Understanding government spending is crucial. For instance, major announcements regarding infrastructure investments could present opportunities to invest in the stocks of infrastructure companies.
Part B of the Budget speech includes tax proposals. The FM's speech should be read in conjunction with the Finance Bill.
Taxpayers
Look up the Finance Bill for a clearer view of aspects that will impact your personal finances. Here you will find details of direct and indirect taxes, including changes in income tax slabs and rates.
"Compare the new slabs with the previous years to understand if your tax liability will increase or decrease after the Budget," says Devansh Jain, principal associate at PSL Advocates & Solicitors.
Also look for modifications or new provisions related to deductions and exemptions (contained in Sections 80C, 80D, etc. of the Income-Tax Act).
Senior citizens
Senior citizens, too, should also look up the speech and then the Finance Bill.
"Senior citizens should look for announcements on pension schemes, healthcare, and changes in income-tax slabs or exemptions that could benefit them, such as higher limits for deductions on medical expenses or investments," says Sandeep Bajaj, advocate at the Supreme Court of India.
Homemakers
Changes in indirect taxes matter a lot to homemakers.
"Since homemakers manage household budgets, changes in GST rates on essential goods and services, including food, clothing, and household items, are particularly relevant to them," says Bansal.
Look for tax benefits on savings schemes that can aid in household financial planning.
Consumers
Consumers should watch out for changes in excise duties, GST rates, or import tariffs that could affect the prices of goods such as electronics, automobiles, and household items.
"Consumers should also focus on Part B for initiatives promoting financial literacy, banking accessibility, and digital payment systems, which can enhance convenience and economic participation," says Bajaj.
Consumers should also consider the broader economic policies and new consumer-related schemes that could impact their cost of living and overall financial well-being.
"This approach will help a consumer gauge how the Budget will affect their disposable income and purchasing power," says Jain.
Besides looking up the Budget documents, read the next day's analyses and reactions by experts (from reliable news organisations) to fully understand the impact of the Budget on your finances.
Feature Presentation: Ashish Narsale/Rediff.com
