The Budget announcements have been made. The finance minister changed the tax slabs giving more money in the hands of the people. However, he also hiked duty on petroleum leading to a fuel price rise.
The entire Opposition walked out of the Lok Sabha in protest terming the Budget 'inflationary'.
For loan seekers there are some bad news with ICICI Bank and HDFC withdrawing teaser home loans. Auto loan rates have also gone up.
What effect will the Budget have on the taxpayers? Has the FM given with one hand and taken away from the other?
In an hour-long chat on rediff.com on Friday, financial expert K V S Manian replied to many Budget-related investment queries. Here is the transcript:
eazy asked, I have a rented my commercial and earn Rs 50,000-00 per month.D I have to pay service tax?
KVS.Manian answers, at 2010-03-05 14:52:59Service tax applicability on rent is a litigated matter , and dehi high court had ruled against it , but the government view is with this budget introduction it has become leviable , but i am sure this matter will go upto Supreme court and then get decided. But as a lessor you are safer if you collect it as a refundable deposit or get an indemnity from the lessee and not yet remit it.
SUPPANDI asked, Which are the infrastructure bonds we can invest 20k
KVS.Manian answers, These will get notified from time to time . I am sure the IIFCL bonds will be part of this . I think enough options will come up through the next year.
ck asked, sir, is housing loan tax benifit continues for next coming years.
KVS.Manian answers, all benefits continue on housing
ck asked, hi, what is IT benifit for a salaried person of ctc around Rs. 100000/-
KVS.Manian answers, If your CTC is 100000 , you have nil tax liability
aamaadmi asked, I am not a mullah, I am not a terrorist, I am not a politician, I am not a government servant, my salary is 20000 INR can you tell me whats there for me in budget?
KVS.Manian answers, As it is the tax liability at this salary is close to nil , after all available benefits are claimed , so yes it has not got much better than that!!!
rajesh_149@rediffmail.com asked, DTC=Direct Tax Code (I know it is going to be tabled in the monsoon session) but if you have any idea on the Housing Loan benefits.
KVS.Manian answers, The detailed rules will be notified later , but the principle essentially is that the 80 c type deduction will be raised to 3 lacs , and hence instalment portion will probably go there , but housing interest deduction will probably go
RK asked, Hi, what is the IT benefit for a salary of Rs. 5,20,000 per month?
KVS.Manian answers, if it is Rs520000 PM , Rs51500 is the total tax saving . If it Rs520000 pa salary the saving will be around Rs22500
Ashok asked, Income tax lower limit 1.6 lakh is nil and there is not change but in this budget benefit given those who are having more income. Do you think this budget is for common people?
KVS.Manian answers, But then if tax is already zero , one cant reduce it any more!!!
rajesh_149@rediffmail.com asked, Need to know .. from DTC perspective would Housing Loan be included under investment umbrella
KVS.Manian answers, I already answered this earlier
RAJA asked, Do you think Budget for the year 2010-11 really affect common man?
KVS.Manian answers, I think it is a reasonably good budget , and if it promtes growth it is good for common man
Pinaki asked, Is that the house loan provided by the banks is going to be incresed?
KVS.Manian answers, The interest rates are headed upwards , but availablity should not be a problem for a credit worthy borrower.
sunny asked, i want to invest in a real state. what are the taxes service tax etc. new law.
KVS.Manian answers, The new service tax is , that it will apply on all payments made to the builder before Occupation certificate has been issued . So it will affect all Investors who book flats , and also all genuine buyers to the extent thay have to pay progress payments to builders . Builders will pass this on to Customers and hence this will mean increased cost of home. Though I suspect this again is going to be litigated
pareshp27 asked, Is there any gain for people who have taken housing loan in new budget
KVS.Manian answers, no new benefits
firstedge asked, until 1.6 lakhs salary there won't be any tax, it was declared in the budget. it is gross salary or net?
KVS.Manian answers, gross salary
GaneshNadar asked, infrastructure bonds will have long gestation periods and low interest. dont you think inflation will kill any gains in this
KVS.Manian answers, If you build in the tax benefit the returns will be as decent as any other comparable debt/deposit options. in the long run you can beat inflation and build wealth by supplementing your debt portfolios with some equity investments , the proportion depending on your risk appetite.
Ramesh asked, Thanks for your reply but do I have to do it even if I get Rs six lacs per annum?Though the matter is in court but currently it is leviable only if amount crosses Rs10 lacs.Still I have to do it?
KVS.Manian answers, yes , i am sorry , in that case you do not need to worry
Trilok asked, I am salaried employee in company earning +8 lakhs. My taxes are deducted at source. I almost save around Rs 20000 per month and transfer this amount to my spouse(House Wife) bank account. Who is liable to pay tax on the interest earning, myself or my spouse, please clarify.
KVS.Manian answers, the income will get clubbed and taxable in your hands
charm asked, Will budget affect mutual fund dividend tax rate? Is dividend of mfs still tax free
KVS.Manian answers, yes there is no change in taxation with respect to MF investments
rege asked, I have already done the agreement...Can the builder still ask for extra amount for tax??
KVS.Manian answers, while details will depend on the rule notified , the answer may be yes
ani asked, Hi Manian,How are you?I have just joined a company so what are the benefits I'll be getting from this budget and where should I invest my money for a proper growth?
KVS.Manian answers, If you have just started earning I would suggest that you should focus on investing in PPF ,ELSS schemes and SIPs in equity funds
rajesh asked, how much will the home loan rates increase and when approximately will that come to effect?
KVS.Manian answers, they have already risen 25-50 basis points , can go up by the same amount again over the next one year.
KVS.Manian says, Good bye.
