Little Relief in Income tax for Indians.

Finance Minister Arun Jaitley's maiden budget has lived up to BJP's promise of ushering in achhe din — at least for the average Joes and Jyotsnas. The basic exemption limit for ordinary taxpayers has been raised from Rs 2 lakh to Rs 2.5 lakh. 

For senior citizens, the limit for income on which they don't have to pay tax has been raised from Rs 2.5 lakh to Rs 3 lakh. 

There is no change in the Rs 5 lakh tax exemption for very senior citizens above 80. The budget has also enhanced the annual deduction available under Section 80C from Rs 1 lakh to Rs 1.5 lakh. This was a long-pending demand of taxpayers. 

The Rs 1 lakh limit was set nearly a decade ago and quickly gets exhausted due to the multiplicity of investments included under Section 80C, a provision that allows investors to reduce their tax liability. The proposed changes can lead to big tax savings for middle-class taxpayers. Those earning more than Rs 10 lakh a year stand to save up to Rs 20,000 annually in tax. 

Raising the basic exemption limit by Rs 50,000 will result in a tax saving of Rs 5,000. A Rs 50,000 increase in the investment limit under Section 80C will help save another Rs 15,000. However, the potential tax savings are lower for those in the lower tax brackets. Taxpayers earning up to Rs 10 lakh a year will be able to save Rs 15,000 while those with an income of up to Rs 5 lakh a year will save a maximum of Rs 8,000 in tax. 

And that too if they can find the additional Rs 50,000 to invest in Section 80C options. But those in the lowest tax bracket still have something to smile about. The budget has not removed the Rs 2,000 tax relief given last year to those earning below Rs 5 lakh a year. This means individuals earning up to Rs 4.2 lakh a year and investing Rs 1.5 lakh under Sec 80C will go out of the tax net. 

The FM also announced additional tax benefits to home loan customers, increasing the deduction from Rs 1.5 lakh to Rs 2 lakh a year. Those with a home loan, availing of tax benefits, and in the highest tax slab can save an additional Rs 15,000 in tax. 

Those earning up to Rs 10 lakh a year can save Rs 10,000 while those in the lowest tax slab stand to reduce their outgo by Rs 5,000. Another key positive is the raising of the annual investment limit in PPF Fund from Rs 1 lakh to Rs 1.5 lakh. 

WILL RAILWAYS IN INDIA BE ON TRACK?? TODAY WHAT RAIL BUDGET WILL SAY??

Departing Platform One at New Delhi station last week was India's fastest train: the test run of the Delhi-Agra express - dubbed "semi-high speed" by local media - topped a record-breaking 160 kilometres per hour on its way to the Taj Mahal. But the velocity, though triple the 50 kilometres average clocked on trips across the country, is barely one-third of the top-speed of China's fastest train, showing the extent to which India's expansive but under-funded train network has failed to keep pace."The capacity of the track is almost saturated," Anurag Sachan, divisional railway manager for Delhi, said in his office next to New Delhi's giant station. "We could go as high as 200 km but we would need to have a completely new track for higher speeds." Budget may not announce major exemptions for salaried class Prime Minister Narendra Modi, who started out selling tea outside a train station, has promised to modernise India's railways and build high-speed engines befitting Asia's third-largest economy. On Tuesday, his new government will unveil its maiden railways budget, with expectations high that he will offer bold plans to improve the service - a lifeline for 23 million Indians every day. Among the goals is bringing much more private money into one of the country's largest state-controlled industries. At present, there's small private involvement in suburban services and locomotive manufacturing. In a speech last week, Modi hinted at how much of a revamp he believed the railways needed, telling an audience in Kashmir that he wanted an upgrade of stations, many of which look much as they did under the British. "Why do our railway stations need to be so old, why can't they be better than our airports?" he said, after waving a green flag to inaugurate services on a stretch of track in the mountain state. PARTNERSHIPS NEEDED Modi's government will announce plans for public-private partnerships in railway infrastructure, the Economic Times reported on Monday, citing government sources, and he is expected to update the country on plans for a high-speed rail between the financial capital Mumbai and Ahmedabad. "If the railways are to fully benefit the climate, the economy, society, the government needs to bring in more money... including from private and foreign investment" said G. Raghuram, professor at the Indian Institute of Management, Ahmedabad and co-author of a report about railway modernisation. Raghuram said allowing private money into freight was a simple and relatively easy shift that would boost the economy. Railways' share of freight has fallen from 90 percent of the country's cargo in 1950 to one-third today, as congested tracks and slow speeds force shipments onto roads - in turn clogging them. The tougher task for Modi will be finding a sustainable fix to the funding crunch facing the railways, including by allowing foreign direct investment into the network, a move resisted by the railways in the past. By a conservative estimate, the railways need 20 trillion rupees ($334 billion) of investment by 2020, according to economist Tirthankar Patnaik at Religare Capital Markets said. That's far in excess of the 1.4 trillion rupees the sector is estimated to earn this year even after an unpopular fare-hike pushed through last month. "Though there are some areas where the private sector can play a role, the bulk of the investment will have to come from the government," said Shri Prakash, a former member of the Railway Board. Prakash said Modi needs to strike a balance between appealing to private profit-seeking investors and keeping fares affordable for the millions who depend on the network. In New Delhi, railway manager Sachan said the job of the railways was to "cater to the masses". "High speed is definitely important but it is much more important to give transport to our poor people," he said.

source: http://www.moneycontrol.com

Achey din (Good Days) will come with Budget 2014-2015?

Will ‘Acchey Din’ (Good Days) come with the Union Budget 2014-15? That’s a million dollar question. Whether you are a salaried worker, farmer, students, senior citizen, corporate leader, entrepreneur, investor, or a home maker, expectations from the new government are running very high.

What’s in store for the common man will be answered by the new Finance Minister Arun Jaitley on July 10, 2014. However, there are lots of expectations from him.

What does a common man want from the upcoming Union Budget 2014-15 :

1. Income Tax Exemption Limit

The Narendra Modi government should give a serious thought for raising the limits for tax exemption, which is currently Rs 2 lakh per annum. The middle class is surely finding it difficult to make the both ends meet, especially because of the soaring prices of essential items. Hence, there is an urgent need to raise tax limits to at least Rs 3 lakh per annum or if possible to Rs 4 lakh. This will help disposable income to increase, thereby expanding the market. The women participation in the workforce is also increasing slowly but steadily. As an incentive, tax exemption for them too needs to be raised to at least Rs 4-4.5 lakh.

2. Inflation

One of the major poll planks of Narendra Modi was to contain inflation on becoming the Prime Minister. Now it is time for him to keep his words. If we look at the inflation rates, we will see that in May 2014, it reached 8.28 per cent, well above the safe inflation limit of 4 per cent to 4.5 per cent (as per RBI guidelines). Since 2012, inflation rate has hovered between 7.5 per cent (Jan 2012) and 11.6 per cent (Nov 2013), as per the data published by Ministry of Statistics and Programme Implementation, India. The government must work in tandem with the RBI, and use both the fiscal and the monetary policies judiciously to contain inflation, which is eating into the purchasing power of the common man.

3. Fuel and Cooking Gas Prices

Any upward movement of fuel prices directly increases inflation. Petrol price have jumped by more than Rs 20 per litre during August 2010- May 2014.

Any increase in the price of diesel increases the transportation cost of essential items. And, rise in the cooking gas prices adversely affects households. So, if these prices increase any further, that will lead to the further weakening of the economic status of the country’s burgeoning middle class. Therefore, a mechanism needs to be put in place where the government has adequate control on fuel prices and does not let them subject to the fluctuating prices of global crude oil prices.

4. Education

A large population of India is young and mostly in schools and colleges. Therefore, there need to be adequate educational institutions so that every citizen can access proper education. Some activists demand that at least 6 per cent of India’s GDP should be allocated to education sector because that would ensure quality education for all. A World Bank report shows that in the last few years, public expenditure on education as a percentage of GDP in India is hovering around 3 per cent.

Therefore, time has come to increase fund allocation for education and create more educational institutions in India, matching global standard so that the brain drain doesn’t take place. To make domestic higher education more affordable, the government must take adequate steps to decrease education loan rates across the board.

5. Housing

The spiralling property and real estate prices are creating impediments in the way of people to buy a house of their own. The Government can help the people by raising tax exemption limit on payment of interest per annum on housing loans from Rs 1.5 lakh to at least Rs 3 lakh. The tax exemptions that are available on principal loan amount are currently included in Section 80C. However, a special category for exempting taxes on housing loans can be created by the government.

These are the top five expectations of people from the upcoming Budget 2014-15.

source:http://www.elections.in/