India Budget 2015, What matters most!

I had not built up too many hopes on the FM , for very good reason

Budget 2015 from FM Jaitley, to me has turned out to be a damp squib considering all the pre-elections talk by Mr Jaitley . Cost of life for the middle and lower middle class goes up while the slab rates don’t really change in accordance with inflation and price rise.

Worse the Senior citizens and small investors will suffer the effects of  the TDS and tax scrutiny monster. Just hope that there is no tax inspector raj and small man is not harassed by the taxman in desperate attempt to garner more revenue for the revenue.

FM has indulged in some minor tinkering with exemptions. This is not going to boost personal spending in any way whatsoever.

The FM does not have what it takes to increase tax base by taxing the rural super rich, neither has he made a serious attempt at  taxing the land mafia and the builder mafia many of whom are politicians or politically connected. No wonder he picks on the meak ie salaried class and retirees.

First  the lollypops :-

1. MEDICLAIM u/s 80 D

In view of continuous increase in medical expenditure, it is proposed to increase the limit of deduction under section 80D from Rs. 15,000 to Rs. 25,000. In case of senior citizens, the limit of deduction is proposed to be increased from Rs. 20,000 to Rs. 30,000.

A deduction to the extent of any payment made on account of medical expenditure but restricted to Rs. 30,000 under section 80D, for very senior citizens not covered by Mediclaim. Awaiting the fine print . A  minor surgery costs Rs 50000 or more in a low cost private hospital these days, so this is not going to bring real respite to very senior citizens or to govt run general hospitals which are in a bad shape due to overcrowding and apathy.

ie Mediclaim costs + medical expense limited to Rs 30000.

2.  Increase in limits of deduction under Section 80DD and 80U for disabled person from from Rs. 50,000 to Rs. 75,000. It is further proposed to raise the limit of deduction in respect of a person with severe disability from Rs. 1 lakh to Rs. 1.25 lakhs.  This while hospitals mark up annually at least by 10 to 15 %.

3. Rebates

Overall limit of deductions under Section 80C, 80CCD and 80CCC still capped at Rs. 1.50 lakhs as per existing provisions of Section 80CCE.

Investment in Sukanya Samriddhi Account Scheme to come under Section 80C – Also the interest accruing on deposits in, and withdrawals from this account will be tax exempt.

4.  The limit for contribution to a pension fund u/s 80CCC up  to Rs 150000 from Rs 100000.

5. The FM has attempted to promote the NPS among the upper middle class with more disposable income, by introducing an additional deduction upto Rs. 50000,   in respect of any contributions made by any individual assesse under the NPS. which is still Exempt Exempt Taxable at maturity.

The Good

  • A very basic attempt to simplify and streamline tax system.
  • No more Wealth Tax , but 2% increase in surcharge instead for the super rich earning over a Crore.
  • 10% TDS Introduced For EPF Withdrawal Before 5 Years if amount is above 30,000 (move against tax evasion)
  • Service tax hike of 2.4% for non-economy class air travel
  • Excise duty on mineral water & aerated drinks increased to 18%
  • PAN compulsory for transactions above 1 lakh.
  • Gold monetization scheme (aim to disclose gold holdings + bring gold into the system) ? bound to fail ? time will tell!
  • To provide incentives for debit/credit card transactions (more power to visa and mastercard ?)
  • Exemption of transport allowance doubled to 1,600 from 800. Considering an avg BEST bus or metro ticket cost of Rs 20 per day this is a joke on the salaried taxpayer.
  • TDS on Recurring Deposit implemented (earlier individual had to file tax)
  • Co-operative banks to also deduct TDS now

The Bad

  • Service tax, previously at 12.36% now 14%
  • Excise duties, which were at 12.36% now 12.5%
  • Govt to impose additional swachh bharat cess of 2% on services
  • NREGA still continues….. when the govt revenues are down quite considerably.

and The Ugly :

  • TDS on OVERALL interest earned above 10,000 in a bank and not branch.(That is so ridicuously low, the same as the Section 80TTA Deduction) ( Terrible news for retirees)
  • DDT Increased From 19.99% To 20.36% in FY16

This means , please invest in property or file ur form 15 H and G. or spend on filing your returns and wait patiently for that refund ! Govt finances are a mess and  the small and senior citizens are bound to suffer as govt wants to extract the maximum in TDS from the most week and defenceless.

Imagine if a senior citizen who earns 250000 from FD interest in banks forgets to file form 15 will have to spend approx Rs 1500 to 5000 on an accountant to file his returns to claim his tds in refund.

Imagine you a small investor with 100 Reliance shares, getting a dividend of Rs 950, will pay the same tax as Mukesbhai Ambani whose dividend is in crores .

Sadly his move on increased DDT is pro rich and regressive and will hamper investor culture as the small investor who may be in the 10% tax slab will end up paying @ 38.8% (Tax @25% + ECess @2% + SHEC @1% & DDTax @17% + EduCess @2% + SHEC @1%).

The way he has treated small shareholders of PSUs to balance his budget eg COAL INDIA, GAIL and ONGC was an early indication of things to come.

Mr Jaitleys policy on Taxing a companys  small shareholders is regressive and anti Long term Equity investments culture . Small investors who will be incentivized to exit short term and pay 15 % STCG.

SLAB RATES for your reference :-

For ASSESSMENT YEAR 2016-2017
RELEVANT TO FINANCIAL YEAR 2015-2016

TAX FREE INCOME :

INDIVIDUALS: Upto 2,50,000 – Nil

INDIVIDUAL RESIDENTS 60 TO 80 Yrs: Upto 3,00,000 – Nil

INDIVIDUAL RESIDENTS 80 Yrs +: Upto 500,000 – Nil ?

TAX SLABS

I. Upto 5,00,0000  {10% of the amount exceeding Tax free Income}

II. Upto 10,00,000 –  {I + 20% of the Income over 500000}

III. Above 10,00,000 –  {I + II + 30% of the Income over 1000000}

CAPITAL GAINS

LONG TERM EQUITY  1YR + : NIL (after STT)

SHORT TERM EQUITY  1YR – : 15% (after STT)

LONG TERM DEBT  3YR + : 20% (after STT)

Deductions and Rebates

Sec 80 D MEDICLAIM : MAX Rs 25000 / 30000 for Senior Citizens

Section 80 TTA: MAX Rs 10000 on Savings Interest.

80DDB :relating to treatment of chronic diseases :Upto Rs.40,000 / Rs 60000 Senior C :Deduction limit increased to Rs80,000 from Rs60,000 with respect to the medical treatment of certain chronic and protracted diseases such as Cancer, full blown AIDS etc., in case of senior citizen.

Section 80DD and 80U for persons with disability and severe disability: Rs.50,000 (Rs.1,00,000 in case of severe disability) :Additional deduction of Rs25,000 allowed for medical treatment differently abled dependant.

Maximum overall Deductions allowed u/s. 80C, 80CCC & sec.80CCD(1) is Rs. 1,50,000*

Sec 80 C :

 Life Insurance Premia, PF, PPF, NSC, ELSS, Units of Mutual Fund referred to u/s.10(23D), Tuition Fees(max. 2 Children), Repayment of Principal of Housing loan, Bank Fixed Deposit of 5 yrs period, notified Bonds of NABARD, Deposit in an account under Senior Citizens Savings Scheme rules, 5 year time deposit in an account under Post Office Time Deposit Rules, 1981 etc.

Sec 80 CCC : Premium paid towards approved Pension Fund (like LIC’s Jeevan Suraksha) Max Investment. 1.5 lakh.

Sec 80 CCD : NPS  Max Investment now Rs 150000 * + 50000

Sec 80 CCG: Rajiv Gandhi Scheme : 50% of the amount invested subject to a maximum of Rs.25,000 (failed scheme)

The deduction is available to a new resident retail investor whose gross total income does not exceed ten lakh rupees.

REBATE U/S.87:

Rebate of Rs 2000 for individuals having total income up to Rs 5 lakh

  • Rebate is available only to Resident individuals and not available to Non Residents.
  • Rebate available to both Male and Female assesses
  • If the total tax payable by is less than Rs. 2000/-, rebate is restricted to “total tax payable”.
  • Rebate is allowed before levy of Education Cess, SHE Cess & Surcharge.
  • Rebate benefit is available to all category of Individuals but not to super senior citizen, since he is already fully exempted up to Rs. 5 lakh.

HPCL BPCL LPG Gas Safety

5 yrs ago the gas agency servicing my gas was not interested in replacing the gas regulator which had got a minor leak and smelt of gas, because the regulator is owned by company. This is how safety works in India, and i had to bribe their inspector to get them to change it.

As i had not ordered a gas cylinder for some time, the agent said inspection was compulsory. Being sufficiently qualified i said ok lets see what their great inspector says. He found out that the Suraksha hose had recently expired, which i knew about and assured that i would replace , then he blocked my connection stating that the inlet valve of the 3yr old sunshine 3 burner gas, i was using was made of metal or GI and it could break anytime ! and said that he would replace it with a brass one the Tube Rs190+ Valve+Labor would be Rs 500 + Inspection charge 75  ! As one of my friends is in the Gas Burner business i enquired with him and he said that the person was talking nonsense as company was ISI certified and the valve was perfectly ok and even most replacement valves he had were gi. I had a major argument with the dealer who restored my connection saying i would be liable for the safety of the cylinder and repeating word safety a few times.

Indane or IOC , HP and BP is offering a safety regulator MFR for a deposit of Rs 400 analog and Rs 600 for digital regulators in select cities. Please enquire with ur gas agent or directly with the gas company .

Its strange to see so many safety devices for Rs 1600 appx that a double mount on the gas cylinder under the regular regulator in the market but HP and BP dont even promote their safety regulators. 

There is a safety regulator by IGT appx Rs 800 sold by many companies and Gas Safe in the market and i dont know if it is legal in India, but are advertised in NEPAL and sold here .

This is India.

India Budget 2014, What matters most!

New Modi Government, New Ideas and New Vision

Considering that the previous UPA Congress Sonia govt under FM P Chidambaram had run down the economy, the current FM Mr Arun Jaitley will have his hands full with repair and maintenance of the economy for a foreseeable period of time.

Rail budget was ok good, mainly because it was not a bihar or bengal rail budget but a National rail budget . Bullet trains are unviable idea for India considering the tickets will almost match airline costs and political interference for unviable routes. The JNR’s Shinkansen network cost 28 trillion Yen, and its privatization paid only 9.2 trillion yen. Japanese bullet or the German ICE are not very affordable to regular citizens of those countries, though they are great for businessmen, why not improve railways for millions of Mumbai rail commuters who bring immense value to the national GDP , and why not introduce more rajdhani style high speed intercity trains ?

Considering the difficulties faced by the govt, the raising of 80C limit by 50% and more importantly the basic exemption by 25% which directly affect the aam admi is commendable .

All that the govt has to do is focus on curbing INFLATION and streamlining the Supply Side and cutting out the layers of apmc rent seekers and middle men from food and essentials supply chain.

For ASSESSMENT YEAR 2015-2016
RELEVANT TO FINANCIAL YEAR 2014-2015

TAX FREE INCOME :

50000 increase in tax free income for Indls and Seniors.

INDIVIDUALS: Upto 2,50,000 – Nil

INDIVIDUAL RESIDENTS 60 TO 80 Yrs: Upto 3,00,000 – Nil

INDIVIDUAL RESIDENTS 80 Yrs +: Upto 500,000 – Nil ?

TAX SLABS

I. Upto 5,00,0000  {10% of the amount exceeding Tax free Income}

II. Upto 10,00,000 –  {I + 20% of the Income over 500000}

III. Above 10,00,000 –  {I + II + 30% of the Income over 1000000}

1. Education Cess of  3% on Income-tax.

2. Maximum 80C exemption & PPF investment limit, now  Rs 1.5 lakh.

3. Housing loan: Rebate hiked to Rs 2 lakh for self occupied houses.

4. Tax on LTCG on debt funds to 20%, and time moved to 3 years… Bad for u if u own  a debt fund .

5. Single Demat Account for all ur financial assets & Unified KYC

6. E-Visas …to promote tourism

7. REITs policy changes to benefit investors in real estate sector.

8. NSC with Insurance … an attempt to make the small savings more attractive.

9. Im not positive on Sardar Patel Statue fund of 200 Crores, though i am a great fan of leaders like Sardar Patel and Bal Gangadhar Tilak, moneys could be better spent on improving PRIMARY EDUCATION ie better world class CBSE style primary education for all, especially for the deserving economically backward people. We desperately need IIT Styled, high quality primary schools for deserving poor kids !

What costs more ?

Cigarettes, Pan Masala, Gutka, chewing tobacco, Colas with sugar and soda, Radio Taxis.

What costs less ?

Footwear, LED lights,  LCD and LED TV prices below 19 inches to go down.

Reactions and observation :

1. Sonia Gandhi says : Jaitley copied Congress schemes, later says no spending on Social sector. Real estate Shares like DLF up 10% , Vadra will be happy with #Budget2014

2. Praful Patel of NCP , the beedi baron will not be happy with the taxes !

3. Ashutosh AAP : There is not a single big ticket idea which world was expecting. Where is the change in Budget?Just an extension of UPA policies.

 

 

 

 

India Budget 2013 What matters most!

P Chidambaram budget speech is  known to induce dreams and elevate people to a euphoric state of mind but the fine print in the draft is known to always have a googly and take back more than what he has given…

This budget is insipid and worse it is subtly populist mainly to avoid a ratings downgrade and there is a big risk that the govt will bring in the populist measures like Food security act on the sly once it makes up its mind on going for elections. The budget does not seriously address concerns regarding pathetic growth and stagflation or the twin deficits that the Indian economy currently suffers from. The numbers are also suspect. Read MB , Read BDRead LM

The govt has already taxed us with High INFLATION which is well above 10.0% and Huge increase in Money Supply, both of which have increased price of gold and housing by 4 to 5 times during the current MMS /Sonia Congress/ UPA 1 &2 govt tenure.

This Budget has given a raw deal to the local Investor class. Equity IPOs , Government IPOs FPOs etc have given a huge negative returns . Equity & Debt  Mutual funds and fixed deposits have given negative returns post inflation in 5 yr period.

TAX FREE INCOME : NO CHANGE ..  😦

INDIVIDUALS: Upto 2,00,000 – Nil

INDIVIDUAL RESIDENTS 60 TO 80 Yrs: Upto 2,50,000 – Nil

INDIVIDUAL RESIDENTS 80 Yrs +: Upto 500,000 – Nil

TAX SLABS

I. Upto 5,00,0000  {10% of the amount exceeding Tax free Income}

II. Upto 10,00,000 –  {I + 20% of the amount over 500000}

III. Above 10,00,000 –  {I + II + 30% of the amount over 1000000}

Tax Credit of Rs 2000 for income upto Rs 500000

Surcharge of 10% on persons with income of over Rs one crore

Dividend Distribution Tax: Surcharge on Dividend Distribution Tax has gone up from 5% to 10%. This has an implication on those is the dividend mode in Debt MF schemes. They will not pay 14.16%, instead of 13.52%. Not much of an implication, though the net dividend would now be lower now.

Securities Transaction Tax The STT on MF/ETF done with the fund houses has been reduced from 0.25% to 0.001%. Similarly the STT on MF/ETF transaction done on the exchange, only the seller will need to pay STT of 0.001%. Again, from an individual investor view point, this may not be very significant as the percentages before and after as both low.

Commodities transaction tax on non-agriculture commodities futures contracts at the same rate as equity futures that is 0.01 per cent of the price of the trade

Investment and Deductions

  • First-time home loans up to Rs.25 lakhs  get extra Rs.1 lakh interest deduction (if not exhausted, the balance limit can be claimed next year)
  • Inflation-indexed Bonds and National Security Certificate to be introduced
  • Investment in RGESS need not be done in 1 year alone but can be done in 3 successive years. Income limit under RGESS raised from Rs.10 lakhs to Rs.12 lakhs
  • Surcharge on Dividend Distribution Tax increased from 5% to 10%. So it may be prudent to consider taking the returns in the form of capital gains if it works out better depending on one’s tax bracket
  • Reduction in STT on equity and MFs
  • Passengers will be allowed to bring in duty free gold jewellery of up to Rs 50,000 in case of men and Rs 1,00,000 in case of women.

………………………………………………………………………………………………………………………………

What goes up
Cigarettes, Cigars, Cheroots, High-end mobile phones,Imported luxury cars, High-end motor vehicles, Sports Utility Vehicles,Imported yatch and motorboats, Marbles for flooring, Set-top boxes, Dining in air conditioned restaurants, Silk clothes, Homes and flats, Parking fees.

What goes Down
Jewellery, Precious stones, Cotton garments,Branded apparels, Carpets, Textile floor, Agricultural testing procedures, Imported hazel nuts, Dehulled oat grain, Truck chasis, Sabudana, Ships and vessels, Cinema and films, Machinery for manufacturing of leather goods

………………………………………………………………………………………………………………………………

  • Investment Allowance of 15% for investment in plant & machinery exceeding Rs.100 crore will boost capital expenditure
  • Surcharge increased from 5% to 10% for companies with Rs.10 crore or more taxable income
  • Amnesty Scheme for Service Tax defaulters
  • No change in the peak rate of basic customs duty on non-agriculture products and rates of excise duty and service tax of 12 per cent.

 Inputs from Moneycontrol and ET

Indian Passport Application System Overhaul

The passport system has changed and there are plenty of new passport offices or Passport Seva Kendras or PSK s . Sadly as incompetent bureaucracy goes most regional office websites including mumbai, do not reflect changes , and one needs to goto the main MEA website for updates.

MEA MAIN PASSPORT WEBSITE INDIA

Find your Passport Seva Kendras or PSK

Toll free number 1800-258-1800

Download Passport Forms 

Grievance / Feedback Links 

R J Kotharis first hand experience and tips 

PSK s in Mumbai

PSK Name PSK Address
PSK Andheri Passport Seva Kendra, The Great Oasis Enterprises Pvt. Ltd., D-13, The Great Oasis, Road no.21, Near Akruti Softech Park,MIDC Marol, Andheri (East) Mumbai – 400069
PSK Lower Parel Passport Seva Kendra, Lower Parel, Trade Point, Kamala Mills Compound, Pandurang Budhkar Marg, Lower Parel, Mumbai – 400013
PSK Malad Passport Seva Kendra, Raheja Tipco Plaza, Unit no. 2-b, Rani Sati Marg, Malad (East), Mumbai- 400097

Day 11 in Annas Fast

Its day 11, and the  Indira Sonia congress isolated in its stand, has decided a formal debate on Saturday, but  started debating the Lokpal in the zero hour informally …Go  Anna!

The congress seems amiss under the leadership of Rahul Baba , with mother Sonia missing from action .

For the first time the Hindustan Times  owner Shobhana Bhartia , who is close to the Gandhis` has come out on IBN Tv18 and clearing the congress stand . (Both media houses are pro congress)

Img Maxabout.

Rahul Amul baba after a long long time has broken his silence and proposed at the loudest his voice can permit that lokpal be a body like the Election Commission.

Img: DD / Firstpost

If we take the EC history into account, i find this to be a ploy to dilute the lokpal to a body of people more pliable and maliable to people in power. Especially considering how the ECs are elected.

Secondly other than people like  T N Seshan andT.S.Krishnamurthy  , no other EC has been unbiased and untainted. Even the  J M Lyngdoh had taken controversial decisions.

The EC post was massively abused during the times Indira Gandhi and the CEC/ ECs like most constitutional appointees was  a mere rubber stamp, who got cushy posts post their tenure.

The Current CEC is Dr S.Y. Quraishi,  is a career bureaucrat? who previously held the post of the Secretary, Union Ministry of Youth Affairs and Sports.

The previous CEC  is Naveen Chavla . His wiki states

Navin Chawla is best known in India for his association with the atrocities and excesses of emergency rule in India. JC Shah, the former chief justice of India commented in the inquiry report that Chawla was unfit to hold any public office.

Dr. M S Gill who formerly served as the Chief Election Commissioner of India from 1996 to 2001 is currently a Congress party member and has served as the of Minister of Youth Affairs and Sports

The Aftermath of Mumbai blasts 13/7/2011

Mumbaikars love their street food and the places where u get the best street food are khau gallis . Yesterday nite  two of Mumbai’s oldest and best khau gallis were attacked. known for their good fast and cheap food they are forever packed with people. These blasts are not just an assault on the hapus aam admi (diamond trader)but also on his stomach.

Diamond Market khau galli blast happened near my favorite banana chips maker 😦

Most of the people that died there must have been there for that quick snack or evening cutting chai n small talk.

It has been raining the whole day. Panchratna mkt which is always abuzz with activity 11 hrs a day, has never been this sombre. There are the curious onlookers everywhere and Cops  have put up barricades enforcing nakabandi on all 3 sides of the blast site sealed what looks like pandal material thats symbolic of celebrations, ironic isn’t it .

pic guardian

The Khau galli at Zaveribazar  in the lane at Bombay bullion has some of the best local junk food from masala papad to mix bhel  that one can get . The place is in a back alley that is not that very obvious , and makes me have  the strongest suspicion of local involvement.