Budget 2013: What we will love and hate in the year ahead

The Union budget for the year 2013-14 as announced by Mr. P Chidambaram recently has received mixed reactions. Some policies will make us rejoice while some may pinch our pockets. Here are a few things that will make us rejoice and dampen our spirits in the coming financial year.

Reasons to smile:

Benefit for the first time investors: The first-time investors, investing in the Rajiv Gandhi Equity Saving Scheme (RGESS) are in for some tax relief. With RGESS, investors can claim 50% tax deduction on the invested amount for three years. If your DEMAT is lying unused yet, this can be the right time to make a smart move.

Golden Rush: The duty free limit on gold has been raised to Rs 50,000 for males and Rs1,00,000 for female passengers. Whether you eye gold as an investment option or simply are in love with the metal’s sheen, this news is definitely a booster for your next trip abroad.

Cheap leather: If you fancy high-end leather products then your passion could cost you a little less in the coming year. There has been a reduction of 2.5% in the import duty of leather products which could result in the price reduction of imported leather goods.

Securities Transaction Tax (STT) reduction: STT, referred to the tax a person pays while buying securities including mutual funds has been lowered by the government. You would now pay 0.01% STT on your equity security investments and 0.001% on your mutual fund investments, thus reducing your expenses and increasing your gains.

Reasons to worry:

Mobile phones become dearer: If the latest smart phone is your next buy, then you would have to shell out more money to own it. Cell phones costing more than Rs2,000 have been levied with 6% additional duty, making you to rethink about your plan.

Fewer eating-out sessions: With a 12.36% of service tax on all air conditioned eateries across the nation, the number of visits to food courts, treating friends etc is going to see a serious dip.

SUVs and motorbikes to cost more: A 3% and 15% raise has been announced on the import duty of SUVs and motorbikes respectively. If you are planning to buy your dream racer-bike or the tough SUV, you need to add some more money to the plan.

The conclusion: 

Analyzing the good and not so good part of the budget which is all set to be implemented from April 2013, looks like we need to gear up. With fewer outings to plush restaurants and spending more time indoors eating home cooked meal, our cholesterol levels can be under control. RGESS can be a motivator for people who were delaying their stock market investments since long, for the sake of tax savings at least. Reduced Securities Transaction Tax (STT) can see more money being allotted to mutual funds (you are still advised to read the offer documents carefully before investing). May be after you have chalked out an investment plan considering these newly introduced policies, you would be better at handling your finances and making profits. Post which the mobile phone price rise and the sky rocketing price tag of your racer bike will not leave you in a dilemma.