How Budget 2005 Impacts You

Proposal	Impact
Earning
Tax slabs recalibrated	Lower tax for all income levels
Higher exemption limits for women (Rs 1.25 lakh) and senior citizens (Rs 1.5 lakh)	Women, senior citizens gain
Sec 88 & 80L abolished; the new Sec 80C allows blanket deductions up to Rs 1 lakh	Everyone gains; but people with taxable incomes over Rs 5 lakh gain more
New fringe benefits tax on employers targets cash reimbursements and soft perks	Salary structures to become cleaner
New bill to set up pension regulator	Growth-oriented pension investments in future
Investing
Corporate taxes down 36.6% to 33.6%; surcharge up from 2.5% to 10%	Higher profitability should drive share prices
Depreciation rates down from 25% to 15%	Capital-intensive manufacturers to take a hit
STT up on all transactions	Marginal increase in transaction costs
Corporate bonds market to be revived; gold exchange traded funds (ETFs) to be launched	Options for investors to diversify portfolios
Spending
Service tax on builders	Apartment prices likely to go up
but deductions on home loans stay	Dream home lure to endure
Clubs, recruitment firms in service tax net	Higher outgo for you
Higher excise on cigarettes, pan masala, gutka, imported liquor	You'll pay more
Import duty on plasma TVs, hi-fi audio, DVD players, mobile phone, PC components down	You'll pay less
Cash transaction tax of 0.1% on all cash withdrawals of Rs 10,000/day	Other modes of fund transfer (ECS, cards etc) will be preferred