Union Budget 2011 For Homemakers

Union Budget 2011 was mixed bag which attempt at reducing the fiscal deficit down to 5.1 per cent from the earlier estimate of 5.6 per cent for the current fiscal year and 4.6 per cent for the next. There is no major increase in service tax and excise duties in view of buoyancy in government revenues. One can say that with the host of expenditure plans announced in the Budget, the finance minister has managed not to burden the common man directly with taxes. The finance minister has made attempts to improve the social infrastructure with direct cash subsidy for kerosene and reduced interest rates for agriculture loans.

The proposal to provide relief to the senior citizens in form of reduction of increasing threshold limit, lowering of qualifying age and introduction of very senior citizen category is a positive step as the senior population can now think of spending the saved money on health insurance schemes which is a major concern for them. There is also a proposal to continue to allow tax payers, the additional deduction of Rs 20,000 for one more year in respect of investment in long term infrastructure bonds.

Budget 2011 relief for the common man

• To start with, the basic exemption limit for general category of tax payers has been enhanced to Rs 180,000 p.a from Rs 160,000 p.a.

• Low- cost housing loans up to Rs 15 lakh, where the cost of house does not exceed Rs 25 lakh will be eligible for 1% interest subsidy, which will help in increasing the demand for such housing. The existing interest subsidy is on loans of Rs 10 lakh where the cost of house is Rs 20 lakh.

• The very senior citizen category proposes to cover resident citizen of 80 years and above. The basic exemption limit for this category has been capped at Rs 500,000

• The proposal to provide relief to the senior citizens in form of reduction of increasing threshold limit, lowering of qualifying age and introduction of very senior citizen category is a positive step as the senior population can now think of spending the saved money on health insurance schemes which is a major concern for them.

• Under the on-going Indira Gandhi National Old Age Pension Scheme for Below Poverty Line (BPL) beneficiaries, the eligibility for pension will now be reduced to 60 years from 65 years at present.

• To reduce compliance burden of small taxpayers, Finance Minister Pranab Mukherjee proposed to introduce a new simplified income tax return form ‘Sugam’.  He also said the Income Tax Department will launch 58 more Aaykar Seva Kendra (ASK) or the Sevottam centre scheme for serving tax payers more efficiently.

Budget impacts homemakers

• The budget has levied service tax on hospitals and diagnostic service providers and with this the end user, the patients, will end up paying much more than earlier.

• When you travel by air within India or fly to exotic destinations abroad or fly abroad to see your near and dear ones, be prepared for a slightly higher service tax.

• Raising the priority home loan limit from Rs 20 lakh to Rs 25 lakh is good news for the low-income group segment.  This will boost the affordable housing segment. However, this will not benefit the home buyers in metropolitan cities as there are hardly any properties available for Rs 25 lakh.

• On the back of raving inflation and rising input costs, the prices of petrol are likely to be hiked by Rs 2 per liter.

• Customs duty on precious metals increased where jewellery purchase just got more expensive

Relief to the senior citizens

• For senior citizens, the increase in basic exemption limit has been enhanced to Rs 250,000 p.a. from Rs 240,000 p.a.

• The age for qualifying as a senior citizen has been lowered to 60 years from 65 years.

• The “very senior citizen” category proposes to cover resident citizen of 80 years and above. The basic exemption limit for this category has been capped at Rs 500,000.

Disclaimer: The article contains data collected from various sources and the use of same is at readers discretion.