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Till this financial
year, anybody who earned up to Rs 5,000 as interest
did not have to pay a tax on it under Sub-Section (3)
of Section 194A of the act. The budget raises that limit
to Rs 10,000 from 2007-08. However, there's no change
in the case of fixed deposits with finance firms or
corporate entities, where the tax-deduction limit stays
at an interest of Rs 5,000. This is also true of "interest
from securities", such as bonds and debentures.
Once the Finance Bill is passed, senior citizens will
not have to rush to the bank or post office every year
to submit Form 15H - unless, of course, their annual
interest earnings happen to be more than Rs 10,000.
But, there's a
rider: the interest should be paid by a "banking
company or a co-operative society engaged in carrying
on the business of banking" or by a post office
"under any scheme" framed by the Centre.
The Rail Budget
, on the other hand, promises to keep aside the lower
berths for women above 45 as well as seniors. It has
also doled out marginal deduction on a seasonal basis,
as well as booking facilities on a wider net.
Overall, changes
in taxes in this Budget don't warrant a celebration,
but its benefits are not to be shrugged away, either.
While the Budget will continue to be the definitive
financial statement of the Government, its role in providing
economic direction will keep reducing. In the personal
finance space, in spite of the radical reforms undertaken
in the past few years, some unfinished work still remains,
notably rationalisation of tax rates, slabs and exemptions.
It may happen in the years to come, but for now, it's
status quo.
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