Palpitations by Pranab

Kamada Kinkar Mukherjee, was improsined for over 10 years, for fighting for India’s freedom, while in Birbhum, West Bengal, his son was honing his skills in communication, writing for the Desher Dak Magazine. In 1969, little Pranab began his political career as a Member of the Rajya Sabha from the Congress Party, rose to become India’s Finance Minister in 1982, and was rated as one of the five best FMs in the world by Euro Money in 1984.

With the Union Budget for 2010-11 being announced on February 26, all eyes are on our venerated and wizened FM – Hon’ble Pranab Mukherjee, who has the unenviable task of What appears to be a case of an irresistible force meeting an immovable object - balancing the country’s economy, while keeping his party in political power.

The Hon’ble FM Pranab Mukherjee must control the aftermath of the global recession including -  

1)     Reigning in hyper-inflation – rising food prices, controlling petroleum hikes, etc. - basically to much printed paper currency running after reduced goods and services

2)     Boosting growth – Agricultural, Industrial, Infrastructural, Occupational… and all the other ‘al’s.

What I fear is that the FM will choose to take the path of least resistance, and wring the neck of the Fixed Middle Income Group, who form a small, insignificant & fragmented vote bank,  but are the easiest to tax & take from.

Kindly have a defibrillator ready for me - Here come my palpitations (courtesy of Pranab) –

I)                   Removal of ELSS

II)                Conversion of PF from EEE to EET

III)              Increased Home Loan Rates

IV)              Removal of Home Loan Interest Deductions

V)                 Increased Property Tax

VI)              Increased Petrol & LPG prices

VII)            Increased Essential Commodity Prices – Roti (Bread) & Kapda (Clothing) Expenses

VIII)         Increased General Cost of Living Expenses

IX)              Increase in Tax Saving u/s 80 from Rs. 100K to Rs. 300K

I hope and pray these palpitations, do not convert into a coronary heart attack!

What are you Grouses? Please post… Misery LOVES company!


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Update - Pranab's Speech Today-

While "IT returns forms for individual tax payers are to be further simplified", dunno how, we are going to welcome Hyper-Inflation (or HUGE Interest Rates) with -

"Income up to Rs.1.6 lakh per year exempt from income tax; up to Rs.5 lakh to be taxed at 10 percent; income of Rs.5-8 lakh to be taxed at 20 percent and income above Rs.8 lakh to be taxed at 30 percent" - more demand

&

Higher prices with immediate effect as "Petrol & Diesel up by 1 Rupee per Litre"

  

I hope that-

"GDP GROWTH SEEN AT 8.5 PCT, INFLATION AT 4 PCT IN FY11"

Here is a brief of the latest provisions on Direct tax under Budget proposals announced by Finance minister Pranab Mukherjee for the Year 2010-2011

Tax on Personal Income:

Income slab (in Rs.) and tax rates

During FY 09-10                                                 Proposed for 10 -11

0 – 1.60L           NIL tax                                      0 - 1.60L           NIL Tax

>1.60 – 3L         10%                                          >1.60 – 5L         10%

>3L – 5L           20%                                          >5L – 8L           20%

>5L                   30%                                          >8L                   30%

In addition to the above, benefit under 80C can be claimed for an amount upto Rs. 1.20L as against existing level of Rs. 1L, by investing an additional sum of Rs. 20000 (max permissible) in Infrastructure Bond to be announced by the Government in the near future.

IMPACT:

Above revision will give you Tax relief of Rs. 56000/- p.a . To this if you add 3% towards education cess, the total relief will be Rs. 57680/-

Proposals with negative impact on your pocket:

Petrol and Diesel prices will go up by Re. 1/- 

Excise duty on Large cars and SUVs (if you propose to buy one) – will go up by 2% (from 20% to 22%).

Direct Tax Proposals which impact Corporates:

Surcharge on domestic companies reduced from 10% to 7.5%

Minimum alternate Tax increased from 15% to 18%

Thankfully none of the other major palpitations seem to have been affected (YET) - status quo maintained.... Praying that I am wrong on Hyper-Inflation Front…