It has been an extremely boring budget (except for those in the stock markets who saw the market up 0.5% at the beginning and end up 2% down towards the close). Let me first tell you what you want to hear.
That’s what you want to hear. But no.
You’re getting closer, but not quite.
Yeah! Now we’re talking.
The income tax slabs don’t change at all. It’s that complicated mix of
With the usual caveats of: if you’re above 60, the first slab is 2.5 lakhs, and if you’re above 80, it’s 5 lakhs. Nothing changes.
Ha, but there’s this tiny little thing. Since apparently inflation applies only to the lowest tax bracket, the finance minister has decided that if your income is less than Rs. 5 lakh, he’ll give you a “rebate” of Rs. 2,000. That is: you calculate your tax and pay Rs. 2,000 less than that.
Do you earn more than 1 crore? That’s 10 million rupees if you don’t know what crore is. ( Then why would you be reading this? But I digress) If the answer is “no”, and you don’t know anyone else that does, then you can skip this section.
Individuals that earn more than Rs. 1 crore will pay a 10% surcharge. That means if you had to pay Rs. 20 lakh in tax, you’ll pay another 2 lakh as a surcharge. (And the 3% education cesses on top of those)
This applies to Individuals, Firms, Co-operative societies and Local Authorities. And Limited Liability Partnerships.
For companies (Private or Public Limited) that earn more than 1 crore, the surcharge is retained just 5%. But if they earn more than 10 crore rupees – bang, we’re up to the 10% surcharge level.
Foreign companies already pay a higher rate of tax for their Indian income, and their surcharge remains at 2% below Rs. 10 crores, and 5% above that.
In effect, if you’re paying more tax, then you’re probably rich. I want to be sympathetic and face the same problem because heck, I get to be rich.
On a more serious note: this increases the taxes that public companies pay, so you will find companies reporting lower earnings, to the extent of about 10% of taxes paid, in the coming year.
Currently it’s like this. The lack of good news is bad news. Your costs just went up due to inflation. You get no extra tax relief. So you’re going to have to cut back on those expenses. And there’s stuff that’s getting more expensive.
Smoking. Duty on cigarettes is up by 18% on cigarettes less than 65 mm. Or some such random number which never ever works because ITC’s profits are always going up. And it’s not those potato chips that sell that much.
But you use a mobile phone? Bonus points if you’re reading this on your mobile phone, because the bad news is: mobiles get that much more expensive. Mobile phone duty is up to 6% from 2% for stuff that costs more than Rs. 2,000. And everything costs more than Rs. 2,000. (On an easier to understand note: If your mobile phone costs Rs. 15,000, you can expect it to cost about Rs. 600 more.)
Okay, I’ll be the bullet point guy.
Yes, shouldn’t there be? Again, bulletpointing:
Some of you think it’s relevant that STT was reduced for stock trading, or that bank-owned-trusts get to securitize stuff better, or that there is an amnesty scheme for service tax non-filers. Or that Tax-To-GDP ration is yada-yada, or that expenditure is blah-blah, or that stock exchanges need to create a debt segment.
Hey, that stuff goes in different post. I’m trying to make this particular post for as broad an audience as possible. And you may have some extra kilos, but not that kind of broad.
Sorry about the bad humour but I just had to make it interesting to write. I hope it was interesting to read as well. I accept compliments, and any form of currency or mastercard/visa.