Feb 25, 2002 07:23 PM
3805 Views
(Updated Feb 25, 2002 10:14 PM)
I would first apologize for the use of the head of returns for putting forth my budget expectations, because if I use a budget one which I have applied for I will not be allowed to write on it again which I want to. !!!!!!
The day is not far away just 3 more days for the time you come to know how much you will have to pay to the Finance Minister (FM).Mr.Yashwant Sinha will announce the Union Budget for the next year on the 28 th feb, 2002which is the D Day infact the B day or the Budget Day . Every single person will be eagerly waiting to know how much LAGAAN he will have to pay. that even includes the corporates.For the corporates all their budgets would depend on the 28th. I am a CA final student & will give my exams in May so whatever little knowledge I have I would like to share it with you folks. I would like to present my expectations or predications as to what the FM has in store for us.
I would just be touching on the personal tax part i.e. individual tax part. There are rumours in the tax circles that the FM might change the 1/6 rule of filing Return of income. He would like to bring in more people into the tax bracket. The likelihood is that he will remove the clause of telephones & may be introduce some other clause instead. One might see something coming up here for the gray market cell users. The lower floor of tax exemption would remain untouched i.e. Rs.50000/- but the brackets of tax are sure to change. The cap in the first slab of Rs.60000/-might change to may be 75000/- and that of the 2nd slab may rise from 150000/-to 175000 or even 200000/-. The rates of tax are not likely to change. Infact experts even say that there will be a forth tax bracket from 500000/- onwards which will be taxed at a higher rate i.e. more than 30% may be 33.33%. As regards surcharge @2% the Fm had promised that he would do away with it at the earliest. So you will not see that increase but the likely chance is that one might see no surcharge being levied this financial year.
After the UTI debacle last year one may see proposals to reinstill the investor confidence in the UTI. So UTI & OTHER mf S may stand to benefit from the budget, as they are likely to get some tax exemptions or incentives for investors to put in their money. They might be allowed to make invts in a wider range of instruments. There is a likelihood that the no. Of sectors in which the exemptions under the cap gains chapter u/s 54EC & 54ED might increase. You may even see the earlier sections of 54EA & EB back in the list of exemptions coz they pertained to invts in MF. But this is just a dart I am throwing in the ocean.
It may hit a dartboard floating or just drown in the ocean.
One may see more schemes of UTI may see landing up in the 80L (int on deposits) deduction specified invts. There might be an increase in the limits for 80L deduction availability.However to compensate this on might see some removal or reduction of exemptions in other Sec 80 deductions like 80D for mediclaim etc.Be ready for a Jolt here.
There is also likely to be some boost to the insurance sector particularly to LIC after the sectors privatisation.More schemes being eligible for exemptions. The same will be the case with infrastructure sector. The investment in the primary markets for companies in the infrastructure sector may be given a boost.
The rebates u/s 88 will also undergo a change with the rate unchanged@ 20% but the permissible limit may go up to Rs.100000/- from 80000/-. The other rebates for senior citizens lower of @100% or 15000/- will remain unchanged & similarly for working women below 65 yrs of age lower of 100% or 5000/- will also remain unchanged.
The good old Agriculture Income exempt will still remain untouched. Unless this is put to tax at least on a minor basis one cant see the economy improving. But taxing not the small farmers but farmers earning more than a particular limit should be put to tax. So most of the politicians having farmhouse & agri products going untaxed should be put to tax. But I don’t think that will happen.
Regarding stock markets I feel there will be a slight push in the index by about 200 pts. But still wait & watch folks the markets are hot keep your hands away. you might burn them.
So, folks wait for the B day to come.
Wait for the B day to come. God alone knows what’s in store for..no no... Yashwant Sinha surely knows but now he is the God. The God of Lagaan!!!!!!
