I did a detailed post on the budget analysis that was published on Moneycontrol  earlier in the day.
I covered most of the important aspects of the budget that are likely to affect someone from the working middle class, but in addition to that I also touched upon what the budget means to the government.
I think this is an important aspect that doesn’t get sufficient coverage because it affects us indirectly, and is perhaps not so apparent as say a surcharge of 5% would be.
I think it is important for us to understand not only things that affect us directly but also the reason why certain steps have been taken by the Finance Minister and his team of advisors. It is only when you develop a holistic understanding of deficits, inflation, subsidies, taxation and the interplay between them will you be truly in a position to understand why certain decisions are taken, and think about them intelligently.
I think this is important and the budget is a good opportunity to learn about some of these things and understand them better. This is a big reason why I’ve been doing the two posts on government income and spending for the last couple of years and will be doing them again this year as well, and will publish them shortly.
The post today doesn’t cover everything, but it does present a good start to get a more rounded view of the budget.
Click here to read Budget Analysis:Â How will the Budget 2013 impact you?
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Hi Manshu,
There is this point in the personal tax clause which states that there is a “tax credit” for people having income upto 5 lakhs. Could you elaborate on what this means?
Thanks,
Rutvik
Hi Rutvik,
I don’t think there have been much details outside of the budget speech, but to my understanding, they will reduce the tax liability of anyone making less than Rs. 5 lakhs by Rs. 2,000.
Hi Rutvik and Hi Manshu… I think Rs. 2000 will be credited in the bank account directly to all those assessees whose income is between Rs. 2-5 lakhs as per their ITR.
Is that clarification out somewhere? Is it also applicable for taxes filed this year?
No, the clarification is still awaited. It is just what I think how it should be. Sorry, if it created any confusion.
Also, it is not applicable for the tax returns to be filed this assessment year. It will be applicable for FY 2013-14 (or AY 2014-15).
Okay thanks.
Thanks Manshu and Shiv, I think we’ll need to wait for the clarification.
Waiting for your pie-chart analysis like the previous year’s budget. They have taught me so much!
Thank you so much! They will be published shortly!
I read your article in Money Control.
Reg Direct Tax Code Bill I have a doubt.Did the Finance Minister say that it would be in effect in the next year?I thought it was dead and buried.
It isn’t dead and buried, not yet anyway. They said they are going to try and implement next year which I think means 2014-15.
Hi Manshu
While going through the Memorandum to the Budget realised by the Finance Ministry, I realised one thing that although introduction of TDS on Property transactions would help the Govt to keep an eye on all property transactions, what would happen if the seller wants to avail the benefit of Section 54 by investing the Capital Gains in specified assets ?
In such cases, TDS would be deducted even in cases wherein no tax is payable.
Hi Karan,
I think it would be similar to something like TDS on our bank FD interest. It gets deducted but if there is no/reduced tax liability, then we can claim a refund or submit 15G/15H. Something similar would be there with 1% TDS on property transactions.
Ya, I also expect something of that sort
But sadly nothing of this sort has been mentioned in the Memorandum to the Budget 🙁
Great point Karan. I don’t think they have given a clarification yet, but the kind of thing Shiv is saying might get done.