What does the Budget contain and how will it affect you

Updated: Mar 1 2006, 05:30am hrs
Measures

No change in direct tax rates

Service tax hiked from 10% to12%,15 more services included

Fringe benefit tax modified

FBT only on contribution to superannuation in excess of Rs 1 lakh per year

Five-year FDs in scheduled banks given Section 80C benefit

Rs 10,000 exemption limit for savings in pension funds removed but brought under Section 80C

One-by-six scheme abolished

Exemption on donations to charitable institutions to be stringent

Hike in old-age pension from Rs 75 to Rs 200 per month and Rs 400 if states contribute too

Implications

Basic taxation remains the same

Taxes on a whole range of services are likely to go up

Slight relief to industry

Will lead to more benefits to the employees

Bank FDs to become as attractive as LIC policies, NSC etc

Will incentivise individuals to invest more in pension schemes and plan for retirement

Hassles for investors reduced

Significant drop in anonymous donations expected

An attempt at improving social security in a country with a large ageing population