Indian Budget 2009-10 – What do our taxes say?

When I was in school and much after that, Budgets were supposed to be bad days as the TV would be hijacked by my father to view the Budget coverage. But all that changed six years ago, when I first followed the budget as a MBA student. I remember the entire college was glued to the auditorium where the Budget was being featured live on a news channel. Business and economics was new to me and I was intrigued by the way, this one day impacts the entire year of our nation’s economy and to an extent ourselves.

Most of us are not much interested in the budget until we come to the Income Tax section. During my first year of work, I was totally into calculations, that how much tax I am going to save when the exemption limit was raised. What are the various sections under which I can get tax deductions and rebate. And even though I may not be working right now, this section still holds maximum interest for me. I am really happy the cumbersome tax filing process is set for a change. The Finance Minister, in his Budget 2009-10 has announced that filing tax returns online is to be made easier in 4 years and a new Saral form 2 will be reintroduced. I remember the Saral form being the cause of various headaches when changes were done to it, supposedly to make it easier to fill. Keeping the trend of raising tax exemption limits, the personal income tax exemption limit raised by Rs 10,000. Income Tax rates exemption limit is raised from Rs 180,000 to 190,000 for women and from Rs.2,25,000 to 2,40,000 for senior citizens. The 10% surcharge on personal income tax has also been removed.

The Corporate taxes have however being left unchanged. But the industry has a reason to cheer about as the intricate and dampening fringe benefit tax has also been abolished. The FBT had caused quite an uproar when it was first announced and the industry will be happy to do without it. Another non favourite tax for most of us who invest in stock market is the security transaction tax. STT was introduced in Budget 2004-05, and is levied every time you buy or sell a security like shares. STT has also been cut.

These are the important taxes impacted by the Indian Budget 2009-10 that I can think of, which may impact the common salaried urban ‘junta’ like us.