By restructuring income tax slabs and increasing the quantum of tax-deductible investments, finance minister P. Chidambaram has put more money in the hands of people and encouraged them to save more. By reducing excise duty on various products, he has also encouraged them to spend more. ‘Mint’ presents a ready reckoner of changes.
Tax: People will save up to around Rs50,000 a year on taxes. This will end up in investments in a variety of products, including mutual funds.
The equity market: An increase in short-term capital gains tax, from 10% to 15%, will hurt trader investors. Some analysts say this will increase investments in mutual funds.
Insurance: Investors in unit-linked insurance products will now have to possess a PAN (permanent account number) card, proof that they are assessed for income tax.
Senior citizens: Apart from the increase in value of tax-deductible investments they can make, clarifications on the tax implications of the reverse mortgage scheme announced previously will help shore up their finances.