The Union Budget appears to be very well-drafted as it comes from a lawyer. At first glance, it seems to cater to the requirements of all stakeholders. It is only after reading the fine print that one realises that the budget fails to stand up as being a good one.
There are no changes in income tax or the slabs or deductions available to income tax assessees. There is, however, a consolation change made for the lowest tax bracket individual earning a total income of Rs 5 lakh or less per year.
He would be given a tax credit of Rs 2,000 corresponding to a 10 per cent inflation on his standard deduction of Rs 2 lakh. The expectation was that there would be some increase in standard deductions and also some increase in tax saving provisions under section 80C. Superrich assessees earning over Rs 1 crore would pay an additional 10 per cent surcharge.
Mumbaikars would be disappointed as there is no increase even in the interest paid on housing loans deduction, which was widely expected. However, even though one cannot buy a house in Mumbai for Rs 25 lakh, there is a provision where additional deduction of interest of up to Rs 1 lakh for a person taking first home loan up to 25 lakh between April 1, 2013 and March 31, 2014 is being given.
Mobile phones that cost more than Rs 2,000 have become further expensive with the duties being increased from 1 per cent to 5 per cent. Those returning from abroad would be allowed higher baggage allowance of Rs 50,000 per male passenger and Rs 1 lakh for a female passenger.
Probably this could see more people travelling abroad and returning with gold jewellery. Nothing much seems to have been done for an average salaried class person and if he or she had hopes from this budget, it could safely be assumed as not having been met.
The writer is founder of the advisory firm, Kejriwal Research & Investment Services Pvt Ltd