Budget 2013: 5 Measures that will Impact you
Attempting to woo the common-man, Finance Minister P Chidambaram on Thursday announced a slew of measures that will cheer most in the country. Even though Chidambaram did not tinker with the income tax slabs, a move that will be met with disappointment, many initiatives were announced that will encourage savings.
ET takes a look at some measures that will get Chidambaram thumbs up from the common-man:
1) Additional exemption for home loans:
In a move that will bring cheer to many prospective home-owners, Chidambaram announced incentives for home loan borrowers. Chidambaram said that any person taking a first time home loan up to Rs 25 lakh during the financial year 2013-14 will be allowed an additional tax deduction of interest of up to Rs 1 lakh.
"A person taking a loan for his first home from a bank or a housing finance corporation up to Rs 25 lakh during the period 01-04-2013 to 31-03-2014 will be entitled to additional deduction of interest of up to Rs 1 lakh," he said.
2) Tax credit: There will be no change in tax rates or slabs for FY14, Finance Minister P Chidambaram said in his Budget speech. However, he announced a tax credit of Rs 2000 for Rs 2-5 lakh tax payers bracket.
3) RGESS more attractive: "The Rajiv Gandhi equity saving scheme will be liberalised to enable the first time investor to invest in mutual funds as well as listed shares and she can do so not in one year alone but in three successive years," he said.
"The limit for investors wanting to invest in RGESS has been raised from Rs 10 lakh to Rs 12 lakh," he added.
4) Inflation-indexed bonds
On the issue of inflation-indexed funds, Chidambaram said, "In consultation with RBI, I propose to introduce instruments that will protect savings from inflation especially the savings of the poor and middle classes, these could be inflation-indexed bonds or inflation-indexed national security certificates," he said.
The structure and tenure of the instruments will be announced in due course, he added.
5) More houses in urban areas:
"In the last budget we provided Rs 4000 crore to the fund in consultations with RBI proposed to provide Rs 6000 crore to the rural housing fund. Similarly it is proposed to start a fund for urban housing to mitigate the huge shortage of houses in urban areas," Chidambaram said.
"I propose to ask National Housing Bank to set up the Urban Housing Fund and in consultation with RBI, I propose to provide Rs 2000 crore to the fund in 2013-2014," he said.
Economic Times, New Delhi, 28-02-2013