Budget Impact on Salaried Taxpayers

·         For Taxable Income Between 8 to 10 lacks & above a saving of Rs. 22,000/-

·         Insurance policy rule changed , Now the Income tax benefit available only if the Sum Insured is 10 Times annual premium, otherwise the Sec 80 C benefit is lost. IMPACT : Check your policy for the 10 times formula you may have to switch products in case of issue otherwise disallowed for income tax

·         Infrastructure bonds facility withdrawn. Impact : You cannot invest Rs. 20000/- in infra bonds income tax addition of Rs 6000/-

·         Insurance Premium: Rs 5000/- worth of Medical Tests can be done & claimed at actual under Sec 80, IMPACT : In case your medical insurance premium is below 10,000/-, you can go for preventive medical tests up to Rs. 5000/-for Dependent family.

·         Bank Interest Deduction: Interest on Savings Bank Accounts is now exempt up to Rs. 10,000/- IMPACT: This is not applicable for FD Interest & applies only to savings bank interest; this will only save the hassle of paying Tax on those sundry interests recd. On Savings bank balances.

·         Donations: Sec 80G exemption of Donation to Charities was applicable for Cash donations also but now Cash donations above Rs. 10,000/- will be disallowed. IMPACT: In case you want to donate pl. do it by Cheque only…

·         HUF: Hindu Undivided Family rules changed IMPACT: it makes sense now to create an HUF for purpose of lowering tax on investments.

SUGGESTIONS
·         INVEST TO THE FULL EXTENT OF 1 LAC RS. IN PPF ACCOUNT -8.8% TAX FREE RETURN NOT FROM 80C PERSPECTIVE BUT FROM EXCELLENT RETURN PERSPECTIVE 

·         LOOK TO INVEST IN TAX FREE INFRASTRUCTURE BONDS. (8.3% TAX FREE RETURNS)  EXCELLENT OPPORTUNITY IN CURRRENT YEAR.