POSTED BY May 20, 2009 COMMENTS (2)ON
Today in morning newspaper, I read that in this budget Tax exemption limit may be raised to 1.75-2.00 lacs . What will that mean to a common person like us .
It simply means that we will be left with some extra surplus every year .
A male who has taxable salary of 4 lacs per year and has 1.5 lacs as exemption limit , pays around 40,000 as tax . Now , after the exemption limit is raised to 2 lacs (assumption) , there can be 2 scenarios .
10% for 1.5 – 2.5 lacs
20% for 2.5 – 5 lacs
30% for 5+ lacs
In this case , he will have to pay 35,000 as tax (assuming tax rates for 2008-2009) . This means a saving of 5,000 on tax from previous year .
10% for 2-3 lacs
20% for 3-5 lacs
30% for 5+ lacs
It must be something like that , this is the minimum we will/should get
In this case , the tax would be 30,000 , and savings would be 10,000 per year.
So we can save in range of 5,000 or 10,000 or someother amount depending upon the changes. What can be the value of this for us as investment point of view.
this money can be invested in a mutual fund through SIP monthly for next 30 yrs ,
5000 can make
14 lacs at 12%
29 lacs at 15%
10,000 can make
29lacs at 12%
58 lacs at 15%
Assumption is that the money can be divided in 12 equal installment and can be invested per month .
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