Budget 2015 : 16 things which every investor should be aware about

POSTED BY manish ON March 2, 2015 COMMENTS (107)

When budget speech was over, the first thing I did, was that I created a poll asking people, if you are happy or disappointed with the overall budget. I was sure that most of the people will vote for “Disappointed” and that’s exactly what happened. Around 192 people voted for it and around 65% people said they were disappointed.

budget 2015 highlights

While, I agree that the budget didn’t offer too many benefits to common man, as they had expected, but the budget 2015 has a lot of things to offer and it’s worthwhile to look at things a little deeper. So what I am going to do is list down all the major changes for you below and explain them

1. No changes in Tax Exemption Limit or 80C limit

One of the big blow for most of the people in India was that there were no changes in the income tax exemption limits and 80C limit. At the moment, there is no income tax to be paid if taxable income is upto Rs 2.5 lacs in a year. Most of the salaried class people were expecting some relief in this area and were expecting that the limit should be changed.

However, they were disappointed heavily, when there was no change. Mr. Arun Jaitley himself had demanded raising the limits from 2 lacs to 5 lacs sometime in 2014 when BJP was not in power, but now when he is finance minister himself, he didn’t do what he “expected” from others.

income tax exemption limit budget 2015

2. Health Insurance limit increased from Rs 15,000 to Rs 25,000 per year

A big change in this budget was increase in health insurance exemption limit from Rs 15,000 per year to Rs 25,000 per year. In the same manner, for senior citizens – its raised from Rs 20,000 to Rs 30,000. This is really a good move because health insurance premiums can go up to Rs 25,000 per year in case one is paying the premium for self, spouse and children. This will encourage more and more people to buy health insurance.

So if you are paying yours and senior citizen parents health insurance premium, you can avail a maximum of Rs 55,000 under sec 80D. It’s a good time to head over to this website and leave your details if you are interesting in buying health insurance.

One more announcement was made that those senior citizens who are above 80 years in age, and are not covered by any health insurance, they can avail a deduction of Rs 30,000 towards expenditure on medical treatment.

3. No tax on Interest under Sukanya samriddhi account

When few months back Sukanya Samriddhi account was launched, that time the interest was taxable and investors complained how PPF is better than this scheme, but Arun Jaitley clarified that there won’t be any income tax on the interest part also, which makes this scheme better compared to its earliar version. However its still debatable if its good or bad compared to other alternatives like PPF or mutual funds in a long run.

4. Transport Allowance Limit increased from Rs 800 to Rs. 1600 per month

Another good thing about budget was that the transport allowance was raised from Rs 800 to Rs 1,600 per month. Transport allowance is not taxable at all.means now out of your overall income, total Rs 19,200 will be deducted

That means whatever income you earn, Rs 19,200 will be deducted on the name of transport allowance (Rs 1600 X 12) and you need to pay tax only on the balance amount, subject to other exemptions and benefits. While it’s doubled from Rs 800 to Rs 1,600, still Its not very high amount, especially for big cities where the transportation expenses are very high.

5. TDS introduced for Recurring Deposits Interest

You might not have heard this in the budget speech, but now the TDS will be cut even for the recurring deposits. Till now for so many years, TDS was deducted only in case of fixed deposit, and not in case of recurring deposits. But now this has changed. While it’s not a big issue, but anyways you need to pay the tax on recurring deposit interest earned, even if TDS is not deducted. An amendment will happen in the definition of “Term/Time Deposit” under sec 194A and recurring deposits will come under TDS.

6. Service Tax Rate Increased from 12.36% to 14%

This was a big blow for common man. The service tax rate was increased to 14% from earliar rate of 12.36%. That means whichever services you avail, you will be paying the additional 1.64% in service tax. In case of restaurants, you will be paying 0.656% more every time (restaurants are required to charge service tax only on 40% part of the bill) . So if your restaurant bill was Rs 1,000, you earlier paid Rs 49.4 as service tax, but now you will pay Rs 56 , which is Rs 6.6 more.

7. Wealth Tax act abolished and replaced with 2% surcharge for super rich

Wealth tax is now abolished. Wealth tax is the tax one used to pay for certain kind of assets worth Rs 30 lacs. The wealth tax didn’t bring a lot of wealth for govt and hence they have simplified the whole thing by removing it. Instead of it, they have introduced a 2% surcharge on the those who earn more than Rs 1 crore a year. This new move will bring in around Rs 9,000 crore in govt kitty!

What I loved about whole removal of wealth tax is that CA students were very happy about this as their syllabus is now simplified :), here is one tweet which confirms that!

wealth tax abolished

 

8. Tax-free infrastructure bonds worth Rs 20,000 crore to be introduced

Tax-Free Infrastructure bonds are back. Keeping the focus on the infrastructure development, especially for railways and roads, the finance minister announced that the bonds worth Rs 20,000 crores will be introduced. The interest on these bonds will tax-free and the maturity will be after the long term tenure of 10-15 yrs.

9. PAN Mandatory for all Transactions above Rs. 1 Lakh

Now, if there is a transaction of more than Rs 1 lac, it would be mandatory to quote the PAN Card. For example, if you are paying Rs 4 lacs for buying a car, you will have to quote your PAN number for sure. This requirement of furnishing PAN is for both purchase and sale transactions. Finance minister also mentioned that tax authorities are also making provisions to check “splitting of reportable transactions” , which means that if someone tries to split the transactions only for the sole reason of avoidance of mentioning PAN, then it would be detected.

Suppose you want to make a transaction of Rs 4 lacs into gold through your debit card, but if you make 5 payments of Rs 80,000 to avoid mentioning PAN, then there will be some mechanism to detect this and you will have to explain it to tax authorities if there is any enquiry.

The Finance Bill also includes a proposal to amend the Income-tax Act to prohibit acceptance or payment of an advance of `Rs 20,000 or more in cash for purchase of immovable property’.

10. FM to Reduce Corporate tax rate from 30 to 25% over next 4 years.

This is not directly related to common man, but its important to mention it here. Just like salaried people pay tax, even corporates (companies and firms) also pay tax and the rate was 30% till now. That will be reduced to 25% over the next 4 yrs. This is really big thing, because a lot of tax is earned by govt from big and small companies and it was a bold move to reduce the taxation rates for corporates.

11. Choice between EPF and NPS

Now employees will get an option between EPF and NPS, but this option will be available to only those employees whose monthly income is upto a limit, which is not yet shared. However the good part is that employer will still have to contribute their share into EPF, only the employee share will either be invested in NPS or EPF.

Both EPS and NPS are retirement tools by govt and I personally think that over the years, govt should keep only NPS and abolish EPF, so that the whole system is more simplified.

12. Upto 10 Year imprisonment for concealment of Income or Assets abroad

Do you have any property or income abroad ? If Yes – please understand that you need to mention and declare it in your income tax return in India. Otherwise it amounts of black money and as per this budget you can be jailed for upto 10 yrs if found guilty. So if some Indian who has or does not have income of India or not, is getting any income outside India and has any assets outside, they have to file the tax returns for it without fail. If govt finds out that you didnt follow this rule, even your assets in India might be siezed in India.

Not just that, even you will have to pay a penalty of upto 300% . Read this article which explains things in a bit more detail.

13. NPS limit raised from 1 lac to 1.5 lacs 

The limit of NPS has been increased from 1 lac per year to 1.5 lacs. NPS is a retirement benefit investment product by govt were you can invest and create your retirement corpus.

14. Pay Rs 12 a year and get 2 lacs accidental insurance

Focusing on poors who do not have any access to insurance products, it was announced that a special scheme with name “Pradhan Mantri Suraksha Bima Yojana” will be launched soon and will be connected to Pradhan Mantri Jan Dhan Yojana . By paying Rs 12/year , one would be eligible for getting accidental cover of Rs 2 lacs.

The exact details on this are yet to come and it would be interesting to read the finer points on this scheme and how it works. Because this scheme will provide 1 lac of insurance for Rs 6 , however in market when you buy any standard accidental insurance, the premium per lac can range from Rs 100 to Rs 500. Lets see more on this when the scheme details come in future.

15. Pay Rs 330/year and get 2 lacs life insurance

Under ‘Pradhan Mantri Jeevan Jyoti Bima Yojana’ one would be entitled to a life insurance of Rs 2 lacs sum assured for a premium of Rs 330/year . This would cover natural and accidental death both and any person under age range of 18-50 will be eligible to buy this policy.

The good part of this scheme is that one would be able to buy a lower sum assured of Rs 2 lacs because for people in lower income range, even a sum of Rs 2 lacs ifs good enough and it would really help them in life, but the premium of Rs 330 is not very cheap, because that turns out of be Rs 165 per 1 lac of life insurance. However in market when you shop for any pure term plan , the premiums are very much in same range. For example when a 30 yr old person buys a 1 crore term plan, he/she pays around Rs 8,000 a year, thats Rs 80 for every 1 lac of sum assured.

Anyways, its a good scheme which can benefit poors. The details are yet to come and we are not sure of the fine prints as of now.

16. Gold Bonds to be launched other measures

A special kind of gold bonds will be launched very soon, which will be alternative of buying the physical gold in market. So if you want to invest in physical gold “only” for the prices appreciation, then you can instead buy these bonds whose prices will move as per market price only. This is really good because there were almost no option to invest in pure gold other than physical gold. And the good part is that this will be from govt :).

Another good thing announced was that there would be Gold Scheme’s where one can deposit their physical gold which are in forms of bricks and coins (anything other than jewelry) and earn interest on it. While this is not very much beneficial for a common man, as they mostly have their gold in jewelry format only. So big institutions, temples, and other charitable trusts would benefit from this scheme.

Apart from this, new gold coins will be minted which will be having India ashoka chakra on it, so it will be “Indian gold coins” which didn’t exist till now and one had to buy foreign gold coins.

So overall – How was the Budget ?

The only question, a common man is asking is “How was the budget ?” . I personally think it was a balanced budget overall. For a salaried person, they might not find too many things in this budget and budget surely disappointed them and then there are some things which are good also. Lets not get into debate of “good” or “bad” because one person opinion might be wrong for someone else. Its a personal judgement overall

So you tell me, how was the budget for “you” and how do you feel about it ? What are good and bad things you find in this budget ?

 

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107 replies on this article “Budget 2015 : 16 things which every investor should be aware about”

  1. Nidhi says:

    Dear Manish,

    I have 1 query regarding TDS on prior period expense.
    In one of our client I got one bill of professional fees that belongs to previous year. While considering the same in books whether I would need to deduct TDS under 194J? Or is there any amendment regarding it?

    1. Hi Nidhi

      A CA is more qualified to answer you query, hence I suggest better get in touch one.

      We are not right people to talk on this

      Manish

  2. spguptahyd says:

    For claiming deduction of Rs 5000/ under preventive maintenance expenditure do i have to collect receipt and preserve it. Please reply to my mail id spguptahyd@yahoo.com

  3. KIRAN says:

    hi manish,

    could you please explain atal pension yojana vs new pension scheme ?

    i am 37 year old & my institute is suggesting me to opt for atal pension scheme by paying 942 rupees per month for next 22 years. and expected to get rs 5000/- pm from my 60th birthday till death. later an amount of 8.5 lakhs will be given to nominee. this is what i was told…

    what you feel? is it good returns? no bank people know this properly !!!!!

    and if i join atal pension yojana, can i join NPS again later?///

    please write APY vs NPS.

    regards
    KIRAN

    1. I am still evaluating it and also writing article about it . Will publish it asap

  4. Amit says:

    Hi Manish,

    What is your opinion about “Atal Pension Yojana”. Do you think this scheme can be useful for housewives and even for working professionals ? The benefits under this scheme looks promising.

    You will get some time to have a article on “Atal Pension Yojana” ?

    All the articles on this site are very informative. Thank you very much for educating us regarding all the financial matters.

    Thanks and Regards,
    Amit

    1. I am writing on it . Will publish soon

  5. Praveenkumar says:

    Hello Manish,

    Did you analyze NPS vs APY (Atal Pension Yojana)? Could you please give a comparative study on this.

    Regards,
    Praveen

    1. Praveen I will be writing on tht

  6. Arun says:

    Does the new limit of 25000 for 80D include 5000 for medical checkups for self and family like last year?

  7. Shivaji singh says:

    Hi Manish,
    Suppose I invest 1.5 lakh in ppf.
    And 50k in NPS.
    Will I get 2 lakh exemption 80c +80ccd 1(b)????

    Thanks
    Dr.shivaji singh

  8. Ashish says:

    Hi manish,

    Now that , there is a option between NPS and EPF , which one should one go for? I have heard NPS has compulsory annuity, so is it beneficial ?
    If possible can you write a post on this .

    1. I would still suggest EPF

  9. mani says:

    hello,
    i had taken up a matter with the banking ombudsman in regards to a rude behavior by a SBI staff. but they simply rejected the complaint stating section 8(2) of Ombudsman act 2006 but forward a feedback of this complaint to the AGM of SBI.
    is this a correct way of approach by the banking ombudsman..should i go for a appeal on this..section 8(2) still states unfair practice by the bank where rude behavior falls in it..

    1. What is that section 8(2) ? Did you first complain to bank regarding this and waited for 30 days before complaining to ombudsman ?

  10. s.prakash says:

    Dear Manish,

    Pl. clarify whether Transport allowance itself is increased from Rs. 800 to Rs. 1600 PM or IT exemption limit on transport allowance is increased.

    Regards,

    1. the exemption is increased . Its your employer who can decide if they want to give transport allowance of 1600 or not

  11. Aditya says:

    Hi Manish

    I work from home, from Hyderabad, for a London based company and my monthly salary gets credited in a local bank in London. I then transfer it to my Indian NRE account and have been doing this since Jan 2011.

    From your point 12, I take it I have to pay my taxes in India as I receive my income in UK (i.e. foreign income).

    I have not been paying any taxes in India at all since my salary was TDS in UK.

    Based on your article do I need to pay my taxes/file-returns since 2011 onwards? along with any fines?

    Please shed some light in this matter as there are quite a few of us working in this manner and it would be good to know if we need to clear any old taxes before March 31st.

    Many Thanks
    Aditya

    1. Hi Aditya

      I think this is would need a more expert opinion from a CA . I am not qualified enough to comment on this . If you have a CA then please ask him, or else I can connect you to our CA , who will charge you for this .

      Manish

  12. neha says:

    ok totally noob question…how do i invest in NPS? do i need a demat account or something?

  13. Mahesh Mhatre says:

    The transport allowance should have been hiked to at least Rs.60,000 per year. The reason is very simple. Too many cars on the road in some cities. It would have encouraged car owners to think of using public transport for such cities. Right now, there is no incentive for a car owner to switch over to public transport. It takes over 45 minutes to travel a distance of 5 kms in peak hours in Mumbai, and Mumbai has no roads left as they cannot be expanded further.

    1. Hi Mahesh

      I am not sure how will increasing the Transport allowance will help in shifting to public transport ?

  14. Deep says:

    NPS ,EPF both r worst retirement products.The government of india it seems wants to create products to get cheap funding for its excesses .How can a debt product be good for long term investment.Beats me.LIC is another one.Collectively they have looted the average Indian.Hope sites like jaago invester,freefincal etc wake up Indians from their financial illiteracy.

    1. Hey Deep

      Thanks for sharing your experience with all of us. It was a great learning.

      Manish

  15. Sukanya says:

    Thanks a lot Sir for sharing this informative post with us. I just wanted to know is there any changes in income tax slab for 2015-2016.

  16. Pritam Ghosh says:

    Hi Manish,

    Thanks for the nice article.

    I have 1 question about recurring deposit.

    I have a recurring deposit of 3000 per month of 3 years in 8.75%. I have already paid of 14 instalment. The maturity value is 123769 which consists 15769 as interest.

    Will this be fall under tds? Plz reply.

    1. Yes, you will pay TDS on that !

  17. Hi Manish,

    Thanks for summarising budget.

    I feel budget was more inclined towards modi’s slogan of “Make in India” with more focus towards Corporates and Infrastructure, as these are some of the prominent factors for growth of any country.

    On Individual Front:
    It was more like govt. is acting like an financial consultant and it’s evident in this budget :
    Long Term Savings:
    1) Increase in health insurance limit – will increase penetration for health insurance
    2) Tax free returns on Sukanya samriddhi account : attract people to save long term for their child.
    3) Choice between EPF and NPS
    4) Limit of NPS raised from 1.00Lacs to 1.5Lacs
    Insurance :
    1) 2 lacs accidental insurance @ Rs.12 P.A
    2) 2 lacs life insurance @ Rs.330/P.A
    Other Savings:
    Gold Bonds
    Even though things were pretty decent, but i somewhere feel that tax burden is shifted from corporates to individuals through decrease in Corporate Taxes by 5% and increasing Service Tax by 1.64%.
    For common man there was not much in the budget, but will definitely get benefited indirectly in long term.

    I appreciate efforts of govt. for the steps taken towards controlling black money and bringing them back to India, by introducing strict rules.
    1) 10yrs jail
    2) 300% Penalty
    3) Seizure of Indian Asset.

    As per me in overall budget was ok, with more focus on countries growth which is need of hour.

    1. Hi Chandrashekar Iyer

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  18. Priyanshu says:

    Hello Manish, I was working for an Indian employer and moved to Canada (Intra Co. transfer) from the same employer. However I’m paying tax to the local Govt. and need to file a return in both countries. In this case, do I need to mention my income while filing Tax return in India (per Point # 12)? Please assist.

    1. Hi Priyanshu

      No , you dont need to mention your out of india income . You just show your indian income . thats all

  19. Rajesh says:

    Hi Manish,

    Thanks for the detailed article. I have a question on wealth tax removal. A person X having second house and not given for rent whole financial year. According to the FY14-15, person X have to pay 1% wealth tax if the house is not given for rent more than 300 days. But in this FY15-16 period, wealth tax is abolished. So with this statement, person X saved 1% wealth tax?

    Thanks,
    Rajesh.

    1. Srinivas says:

      There are two issues here.

      Income and wealth tax.

      If one has two houses and stays in one, the other is deemed to be let out and income tax is to be paid on deemed income as per some rules.

      Wealth tax is on the wealth possessed by a person and there are a different set of rules for this.

      When wealth tax is taken out, the second one goes out and the first one remains.

      Trust this clarifies.

  20. suman gayen says:

    Thanks for the nice article. Please clarify 80 CCD limit and clear the change with respect to the present structure.

    1. Hi Suman

      What clarity you need in that ?

      1. suman gayen says:

        Deductions under NPS scheme. what is the present limit and what will be in the next FY.

        1. 1.5 lacs as now . Next year, how can we tell that ?

  21. Vijayendra Rao says:

    Hi Manish,

    You should also include the increase the exemption limit of 80DD, 80DDB & 80U.

    1. Thanks for suggesting that

  22. vyasang says:

    I receive monthly Rs.800/- as TA allowance. As the exempable TA allowance is now raised to Rs.1600/- per month, can I claim an exemption of Rs.1600 per month or I can claim only the amount I actually receive as TA i.e. Rs.800.
    Plz clarify.

    1. You can claim only the amount you get, maximum to 1600

  23. Manoj says:

    Hi Manish,

    I am an Indian citizen working in UAE since 3 years.
    As an NRI, do I need to file income tax every year in India and show the foreign income?

    1. No Manoj

      If you do not any property in UAE , then you dont need to

  24. Zubin says:

    No change in tax slabs, only increase in transport allowance. However, service tax increased from 12.36% to 14%. Personally, I feel this is going to increase monthly entertainment spends.

    1. Hi Zubin

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  25. Hardeep Gahlaut says:

    Hello Manish,
    Is the medical allowance of Rs 1250 per month applicable to all tax payers or only salaried staff?

    1. NP says:

      Hardeep,

      this is applicable only for salaried class only if reimbursed by the employer.

    2. Only Salaried and that too if employer is providing that !

  26. Robin says:

    Hi Manish,
    I am an Indian citizen. I don’t have any income in India since last 7 yrs. I am working in USA since last 7 yrs. I don’t own any foreign asset but I do have foreign income every month for which I am paying tax in USA.

    Do I need to file income tax every year in India and show the foreign income?

    1. Hi Robin

      No you dont !

  27. Ankit Mehta says:

    hi Manish,

    I believe apart from many personal finance advisors/planners, many people feel the budget is balanced.
    i dont know how is it balanced. Arun Jaitley said that they have inherited a set of problems from congress govt, was not he aware of the same when he said the tax slabs for individuals be made 5 lacs…and as they come in power they just conveniently forget all they promised…
    the budget was a big and total disappointment….people are made fool by all the development promises…all congress ever did was to loot middle class and the BJP is doing the same….service tax increased…diesel price increased….the problem is not getting money…the problem is to stop corruption and save tax payers money….all goverment fail to stop corruption…coz they benefit from it…..its just BJP’s payback budget to their corporate supporters

    1. Anjan says:

      I agree. On one that they are reducing Corporate tax and on other hand, they increased Service tax. As if the common man isn’t already overburdened with taxes everywhere, this will make things worse. Why reduce corporate tax? Corporations are making money head over heels as it is.

    2. Ankit

      If you look at salaried employee, it might look balanced 🙂 . But if you exclude them, then it might. Again its your personal judgement .

      1. Ankit Mehta says:

        Hi Manish,
        Thanks for ur response.

        “Might” being the keyword here.
        we indians are paying taxes on almost everything and i suppose if govt gets a chance even the air we breathe will be taxed.
        budget is not balanced and it isnt an personal view.
        125 crore indians are in impact zone due to such a lousy budget.
        Even if the inflation is all time low there is no grass root impact of that seen. Everything is as costly as it was and maybe even morE.
        its just people are taking this budget lightly coz they all voted for bjp and now they dont want to loom fools in going against them.
        in 5 years even this govt will become equivalent of upa…..

        1. Yea , different people, different way of looking at things 🙂

          Manish

  28. SAMPATH says:

    Could u please help us in understanding 80CCD and 80D

    1. Santosh says:

      80D: Premium paid for Health Insurance (earlier limit for non-senior citizen was Rs. 15000, in this budget, it is increased to Rs.25000)
      80CCD: Contribution made to pension scheme notified by Central Govt .e.g.,NPS.
      80CCC: Contribution made to Pension Funds
      80C: Contribution made to Life Insurance, PF, PPF etc.
      There is a section called 80CCE which specifies the aggregate amount of deductions under section 80C, section 80CCC and Sub-Section-1 of Section 80CCD.
      Before this budget, total of 80C, 80CCC and 80CCD was Rs. 1.5 lacs.
      From this budget, 80CCD may not be part of 80CCE. Whatever contribution will be made in 80CCD will be separate deduction.

      1. NP says:

        Santosh,

        The limit is 1.5L – Sec 80CCE (which includes NPS) and 80CCD of .5L.
        So anyone can get min of .5L or max 2L (1.5L + .5L) by investing in NPS.

        1. NP , you can get max of 2 lacs by investing in NPS

      2. Hey Santosh

        Thanks for sharing your experience with all of us. It was a great learning.

        Manish

  29. nitesh patel says:

    and what about tds on rd details please

    1. I have already added in article

  30. Krishnaraja says:

    Hi Manish,

    It was a nice article. Could you please help us in understanding. 80CCD limit. Is it merged with 80C limit. Or it is a separate 50,000 limit for 80 CCD. Can we invest in any other pension schemes. Is it only for NPS? Is there any options better than NPS

    1. Anjan says:

      I think 80CCD(2) is separate from 80C but 80CCD(1) definitely comes under 80C overall limit. I hope Manish will clarify on this.

    2. Hi Krishnaraja

      This 50k is seperate than then regular 1.5 lacs. So you can invest upto 2 lacs in NPS if you want and get full deduction !

      1. Krishnaraja Rao B says:

        Thanks Manish, It is really helpful.

  31. Hardeep Gahlaut says:

    Dear Manish,
    Is the transport allowance of Rs 1600 applicable only to salaried people? I am retired and have other sources of income. Can I claim the deduction of the transport allowance ?

    1. No , its only for salaried people

  32. Bahubali says:

    Manish,

    You gave the detailed points. Thanks for Sharing.

    In the last budget itself FM provided the benefits to salaried people in the form of extension of 80C from 1 lakh to 1.5 lakh , House property interest benefit from 1.5 lakh to 2 lakh.

    It seems there was no room for him to extend further benefits this time but he focused budget more on corporate sector, so that India could attract more of them.

    1. Hi Bahubali

      Thanks for your view 🙂

  33. Aparna Mohare says:

    Hi Manish, very good article.
    As a salaried person I want very pleased with budget initially however I agree it has some good initiatives for long term economical development.

    Just a small query, the additional exemption under 80CCD is applicable for only NPS or any pention fund (like FT) will do.

    1. Its applicable for any pension fund

  34. Abhay Taneja says:

    Hi Manish,

    I was personally expecting the hike in the Medical Allowance (Rs. 1250/-p.m.) which we get as part of salary component. Don’t you think this amount is too less and should have been revised? These days Medical expenses, hospital charges, doctor fees etc. have increased so much.
    Also, similar thing should have been done for LTA, which would have given boost to Tourism Industry as well as salaried persons.

    1. Yes, its very less and should be increased. Lets see if that happens next time !

  35. Prashanth says:

    Dear Manish, very good article about the Budget. However, there is 1 major point you haven’t covered – about REITs. It seems that the FM has given pass-through tax benefit for the trusts & has also relaxed the capital gains tax exemption for investors who wish to exit after 1 year. While on the face of it, it appears not much beneficial for investors, I think the relaxation in tax structure for REITs will spur their development in Indian market. What do you think?

    1. Hi Prashanth

      I didnt study that point well . thanks for sharing this information here

  36. Suresh D says:

    Hi Manish,
    Good day! Thanks for sharing the Budget 2015 in nutshell. I think it s not beneficial for salaried professional like me!
    Please do and share the article on Gold bonds & NPS respectively

    1. Hi Suresh D

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  37. Shilpi Nigam says:

    Thanks for summarizing the budget. Please can you do a separate article on NPS and its benefits. Most people don’t know much about it.
    Thanks a lot.
    Shilpi

    1. Hi Shilpi Nigam

      Will do it soon

  38. hit.singh says:

    Need to understand this additional 50000 under NPS.

    How good it will be for long term means 25yrs assuming NPS comes in picture once u retired or at age of 60.Will it better option or increasing investment in SIP in queity MF for such long term is better option.

    1. Rajesh Shastry says:

      In my opinion NPS is a good option based its performance till date. I have been investing in NPS since the last 1 year and the returns have been in excess of 15%. The charges are way below the ULIPs (also one of the reason why it has not been promoted as much)…which means, a good amount gets invested in the market. The max you can invest in equity is 50%. Some corporates have subscribed to NPS, so the whole contribution by the employee is out of the tax ambit. Now with renewed focus on NPS, I assume it will gain more favour with the individuals/ employees.

      1. Hi Rajesh Shastry

        Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

        Manish

    2. Hi hit.singh

      I think SIP in equity fund is still better for a long term like 15-25 yrs

  39. Avijit Paul says:

    Kindly add details of “Atal Bihari Pension Yojana” to the list.

    1. Hi Avijit Paul

      Will do

  40. Rajiv Ahuja says:

    Nice analysis.

  41. santanu says:

    If you are ready to take more risk and understand Mutual fund or stock market, then Equity is the best way to accumulate corpus for child education in log term. But again if you need guaranteed risk less return, then Sukanya Samriddhi may be good. But remember this product may give less return as interest rate is not fixed. Now it is 9.1%, but it will change every year. If your investment horizon in more than 15 years then you can also go with PPF as well, again both PPF and Sukanya Samriddhi has liquidity issue.

    1. Deepak says:

      Hi Santanu,

      Please let me know what is the the liquidity issue with PPF and Sukanya Samriddhi.

  42. priyajitgh says:

    As a PSU salaried employee,I have to deposit in CPF(Contributory Provident fund).Can I also open NPS account & deposit in it?

  43. priyajitgh says:

    Plz give details about extra 50k deduction over already existed 1.5 lakh 8oC limit for depositing in NPS fund

  44. Sanjay Prajapati says:

    Hi Manish,

    Desperately waiting an article from you form the budget day, I personally think it was really very disappoint me as salary class people, if we invest more then we can save more tax otherwise we need to pay tax, and more on that we need to pay more service tax, this budget is good more corporate sector rather than salaried class people like me.

    I really want to know your view about gold bond proposed in this budget.

    Thanks,
    Sanjay

  45. Is there any advantage of investing through Sukanya Samriddhi vs investing through equity-mutual-funds-for-daughter’s-education?

    1. Hi Sambaran Mitra

      Equity funds will give higher returns over long term

  46. Ujjwal says:

    Very informative Manish. Thanks for detailing out. Please also include information on 80CCD. I believe there is an additional exemption for 50K. Also can you please provide more information on bonds, whether the exemption will be additional, over 80C ?

    Thanks & Regards.

    1. santanu says:

      Hi Ujjwal,

      The extra deduction under section 80CCD is for investing in NPS scheme. And if you are exhausted your entire 80C limit, I think you can invest in NPS further 50,000 over 1.5 lakh. Means total 2 lakh. But NPS may not be the best product for retirement planning, as it has a liquidity issue.

      I think previously investment of 20,000 max allowed in infra bonds under section 80CCF, beyond 80C. Not sure about what would be now.

      Manish, kindly correct me if I am wrong.

    2. Phani says:

      It seems the infrastructure bonds are not extra exemption (over and above 80C) – i.e they are not like 80CCF bonds we had few years back.
      Yeah , i am also interested in knowning about the 50K extra exemption on 80CCD.

      1. Phani

        Infra bonds will have the interest as TAX FREE , not the amount contributed.

        50k extra under 80CCD if for NPS , its above 1.5 lacs in 80C

        1. SAYAN KUNDU says:

          I am a central govt. employee. My annual NPS contribution is arround 65000/-. Other than this I invest in PPF @Rs 150000/- per year. Can I claim deduction of Rs 200000/- from my taxable income?

          1. No , its only upto 1.5 lacs

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