Powered by

When the Budget 2006-07 presented by Finance Minister P Chidambaram on Tuesday, he announced no changes in personal taxation rates. Yet, with the modification of fringe benefit tax, etc, your tax liability might change.

Here's a guide to how the salaried person, the working woman, the senior citizen, the housewife, the student, the Non-Resident Indian, the farmer, the day trader, etc are affected.

Senior Citizen   No changes have been made in your tax structure. You will continue to enjoy tax free income of up to Rs 1.85 lakh. You will continue to pay tax on interest from bank deposits and other post office instruments. The only good news is that if you were being forced to file returns under the one-by-six criteria, you needn't bother now. The one-by-six criteria has been abolished.

Woman   No changes have been made to your tax structure. You will continue to enjoy tax free income of up to Rs 1.35 lakh.

Student   While no changes have been made in the tax deductions on education loans, the finance minister has given an impetus to several new fields of studies. For instance, four new institutes for hotel management are proposed to be opened in the states of Jharkhand, Chattisgarh, Uttaranchal and Haryana. The existing National Institute of Port Management, Chennai, has been renamed as the National Maritime Academy, and it is proposed to upgrade it into a Central University under an Act of Parliament. The University will have regional campuses at Mumbai, Kolkata and Visakhapatnam. Moreover, in order to foster research and development in biotechnology, the Ministry of Science and Technology has decided to accord the status of an autonomous National Institute to the Rajiv Gandhi Centre for Biotechnology, Tiruvananthapuram, Kerala.

Salaried Person   Your tax structure remains the same. The FM has brought about some minor changes in the Fringe Benefit Tax. For instance, if superannuation formed a part of your salary package, you should be a happy man. The Finance Minister has exempted, from the scope of FBT, a contribution of up to Rs 1 lakh per employee to superannuation fund. Some other changes include slashing of FBT on tour and travel expenses to 5% from the earlier 20%. If this forms a part of your salary package, you may be better off.

Stock trader    As a trader, there is no change in your capital gains tax. However, the Securities transaction tax has gone up by 25%. On your delivery based trades it will be 0.125% from the previous 0.1%. On your non-delivery based transactions STT was hiked to 0.025% from the earlier 0.2%. Taxable Securities Transaction Pre-Budget Post-Budget Rate (%) Payable by Rate (%) Payable by Delivery based trades 0.1000 Both by Purchaser & Seller 0.125 Both by Purchaser & Seller Day Traders 0.0200 Seller 0.025 Seller Derivatives 0.0133 Seller 0.017 Seller Sale of a unit of an equity oriented fund to the Mutual Fund 0.2000 Seller 0.250 Seller

Consumer    Here's what got cheaper: Anti aids drugs and anti cancer drugs Aerated drinks Small cars DVD Drives, Flash Drives and Combo Drives Condensed milk, Ice cream,  Preparations of meat, Fish and poultry, Pasta and yeast Dosa and idli mixes Footwear LPG stoves Printing and packaging paper   Here's what got costlier Vanaspati Packaged software sold over the counter Set top boxes Service tax increased to 12% from 10% and the following services added: ATM operations, maintenance and management; Registrars, share transfer agents and bankers to an issue; Sale of space or time, other than in the print media, for advertisements; Sponsorship of events, other than sports events, by companies; International air travel excluding economy class passengers; Container services on rail, excluding the railway freight charges; Business support services; Auctioneering; Recovery agents; Ship management services; Travel on cruise ships Public relations management services.

Small businessman    Cash transaction tax continues on cash withdrawals of over Rs 25,000 from current accounts.

Investor   There is some cheer for investors looking for tax breaks. Bank fixed deposits in scheduled banks for a period of more than 5 years will be available for deduction under section 80C. You can invest up to Rs 1 lakh to get the benefit. You retirement planning also gets a boost. The limit of Rs 10,000 invested in pension funds has now been removed. You can now invest up to Rs 1 lakh to get a deduction under section 80CCC. For mutual fund investors there is more good news. Dividends from close-ended mutual funds, which were earlier taxable, will now be tax-free.

Home buyer   No changes in tax sops for home loans.

Persons eligible for filing taxes    The one-by-six scheme has been done away with. You will now have to file your returns only if you have income that is taxable. That means, men who earn income of above Rs 1 lakh only need to file tax returns. For women and senior citizens, the limit is Rs 1.35 lakh and Rs 1.85 lakh respectively.

NRI   For NRIs, The TDS rate on short-term capital gains on equity and equity oriented funds has been reduced to 10% in line with the tax rate imposed by Sec. 111A.

Farmer   Farmers will be a happier lot. Several incentives have been doled out to them in the budget. Farmers will not get more loans from banks. The government has increased the target for farm credit from Rs 1.41 crore last year to Rs 1.75 crore. Farmers will get a 2% cash subsidy on interest portion of crop loans taken from scheduled banks and regional rural banks (RRBs) during Kharif and Rabi 2005-06. Short-term credit from co-operative banks and RRBs will be available to farmers at 7% with an upper limit of Rs 3 lakh on principal amount with effect from Kharif 2006-2007.