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Budget 2011-12: What's in it for young India

Budget 2011 has been announced and the much-awaited list of what is cheaper and what is dearer is finally out. A lot is being spoken about its impact on the various segments of the country in the last few days. But what does the current budget have in store for the young salaried?

Here are the details in a nutshell of the implication it bears on everyday aspects of living.

Brief overview

Though investment and personal taxation scenario seem to bring quite a cheer to many, the Union Budget 2011-12 has not been very kind on certain important aspects such as health care and travel. Furthermore, with inflationary pressures in the economy too, a further rise in the cost of various essential commodities could probably be expected.

Impact on investments and personal taxation

Impact on investments and personal taxation

80CCF benefit extended

The additional tax deduction that prevails in the current assessment year under section 80CCF is to continue for a year more. So here is an additional saving for taxpayers, over and above the existing Rs 1, 00,000 under section 80C.

Increase in insurance premiums

A tax of 15 paise per Rs 100 of your premium would be levied hence forth. This is applicable to all endowment policies. With this new addition, you could expect to receive lesser bonus and an increase in the premiums you pay for your life insurance policy.

Tax exemption limit raised

For individual male taxpayers, the tax exemption limit has been raised from Rs 1,60,000 to Rs 1,80,000. This would leave more disposable income in your hands. No change has been proposed for women assessees who remain at Rs 1,90,000.

Filing of tax returns

Salaried individuals who do not have other sources of income or, whose income does not exceed the taxable limit, and is subject to tax deduction at source (TDS), have no need for filing tax returns. You could now breathe easy over the exercise of filing those complicated tax returns.

Impact on automobiles and fuel

Cost of fuel

There has just been a marginal reduction in excise duty on petrol, but owing to the soaring oil prices globally, fuel prices are not going to be impacted. You could probably even expect a further rise in the price of fuel in the days ahead.

Cost of cars and two wheelers

Cost of cars and two wheelers remain unchanged as the budget has maintained the excise duty on this. Electric cars however are to become cheap. So go the environment-friendly way and try out those electric cars. They would now cost you lesser.

Impact on electronics and computers

Personal computers and printers

A 5 per cent excises duty has been imposed on microprocessors and DVD writers. Expect to see an increase in the cost of your personal computers and laptops. Inkjet and laser printers though have got cheaper.

LED and solar lanterns

LED and solar lanterns get cheaper. We could probably expect the cost of electronic goods that require LEDs to cost lesser.

Mobile phones

Well if you have been planning to buy yourself a swanky new mobile phone, here is some bad news. The budget has brought about a hike in the excise duty of phones, making your mobile dearer.

Impact on medical and health care facilities

Premium medical care

You would now have to pay more for premium medical care. Air conditioned hospitals with 25 plus beds would now bear a service tax.

Syringe and needles

If you thought it was just the service tax, here is more bad news. Cost of syringes and needles too are set to increase, making the entire hospitalisation an expensive affair.

Health check-ups

Health checkups whether at a hospital or clinic, is to attract a service tax too.

Vaccines

All vaccines than do not form part of the National Immunisation Programme, will attract a concessional duty of one per cent without CENVAT credit facility. So such vaccines are going to now cost you more.

Food and lifestyle products

Branded apparel

All branded clothes and jewellery are to get more expensive owing to the imposed excise duty of 10 per cent.

Ready to eat food items

Food items, such as soups, ketchups, coffee and tea mixes, supari, flavoured milk, and other ready to eat items are going to cost more as a higher excise duty has been imposed on these.

Liquor

With service tax imposed, drinking liquor in air-conditioned restaurants is now going to cost you more.

Travel and hotel

Air travel

Your air travel would get more costly. The services tax existing on domestic air travel has been increased by Rs 50 and international air travel by Rs 250

Hotel rooms

Your family holiday is now going to cost you more than what it did pre budget. Hotel rooms which cost Rs 1,000 and above are now to charge an increased service tax.

Home loans and real estate

Low cost housing loans

If you are looking at purchasing a low cost home (of say Rs 15 to 20 lakh) here is some news to cheer up. Low-cost housing loans of Rs 15 lakh will be eligible for one per cent interest subsidy, to help increase the demand for such housing. So your loan for such a house has just got cheaper. The existing interest subsidy is on loans of Rs 10 lakh where the cost of house is Rs 20 lakh.

Priority sector home loans

The home loan limit for the priority sector has been raised to Rs 25 lakh from the earlier Rs 20 lakh. Also, the budget liberalised, the existing interest subvention of 1 per cent on housing loans of up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, from the present limit of Rs 10 lakh and 20 lakh respectively.