Budget 2011 is out. How does it affect IT professionals? Short answer – not much. The full papers are yet to be out, but the initial reports suggest these changes:
- Income tax exemption limit raised to Rs. 1,80,000 from Rs.1,60,000. Everyone earning more will need to pay Rs.2000 less.
- Changes in how IT returns are filed. Initial reports suggest those who earn only salary income may not have to file it themselves, their employers might be able to do it.
- Airfare to increase by Rs.50 for domestic and Rs.250 for international flights.
- Hotels with tariff more than Rs.1000 per day and liquor-serving air-conditioned restaurants to come under service tax (10%).
- Pay service tax (10% more) in ‘super-specialty’ hospitals and diagnostic centres.
- The Rs.20,000 tax deduction for investments in infrastructure bonds will stay for one more year.
- 1% interest subsidy on home loans up to Rs.15 lakhs.
- All insurance schemes which offer investments (in short, all except term insurance) will need to pay tax – so those who invest in them might have their benefits reduced.
- Direct Tax Code (DTC) to come into effect from April 1, 2012. Plan your taxes this year itself!