The individual story

• “I don’t see new income segments coming into the tax net, only deepening the tax on those who are already in the net”
Sanjeev Bhargava,
Advertising professional

Adman Sanjeev Bhargava (41), who lives in Gurgaon with his wife Monica (34), son Samarthya (12) and daughter Samriddhi (7), intersects with the tax slabs at the highest rate of 30 per cent with a 10 per cent surcharge since he earns more than Rs 8.5 lakh a year. Not only is he taxed at a higher rate now, at 30.6 per cent plus a 12 per cent surcharge, he also has no recourse to rebates to bring down his tax liability, since Section 88 rebates stop kicking-in after Rs 5 lakh of taxable income. He is affected both by the increased cess as well as the service tax of 10 per cent on the ad business. The size of the business (ad spend), he says, will shrink.

• “I am relieved that doctors are not on the service tax list. Other than that I am happy about the tax proposals. I don’t mind paying the 2 per cent cess and am happy that bother-free investments in small savings at 8 per cent can continue”
Ajay Dave,
Eye surgeon

Eye surgeon Ajay Dave (46) and wife, Bharati Dave (44) a Geography lecturer at Delhi University, fall in the Rs 3 to 5 lakh income category paying 30 per cent of their income as tax. While Bharati is used to making her rebate tax shelter, Ajay prefers to invest in equipment for his clinic in East Delhi. They will now pay taxes at the rate of 30.6 per cent due to the cess. They are happy about the removal of tax on long term capital gains, as this will benefit long term users of equity like them.

• “This 9 per cent option is good news for us as inflation brings down our income”
T N Kaul,
Retired

T.N. Kaul (69) and wife Rupa Kaul (67), live a retired life in Delhi. After retiring from the private sector, Kaul dabbled a bit in mutual funds and stocks, burnt his fingers, and has now put his life’s savings in tax-free RBI bonds. His tax status is nil, he says, because of the low-return but tax-free RBI bonds. He is very happy about the small savings rate staying the same, specially on the Monthly Income Scheme and with the new 9 per cent saving option. He was hoping this would be tax-free.

• Sanjay lalbhai,
MD, Arvind Mills
While the Budget has proposed duty exemption to the handloom and powerloom sector, the composite mills have the option of duty exemption or CENVAT. One has to wait for more clarifications to assess the full implications. The Budget has tried to address the concerns of the unorganised sector, keeping needs of the composite mills in mind.

• Raman Roy,
Wipro Spectramind
It is a positive move to not tax software and related services. There is, however, no focus in this Budget. The only positive is that import duties on PCs have been slashed. But this, too, is only going to reduce some paperwork. Besides, our sector needs highly skilled manpower, so the government must emphasise on higher and not just primary education.

• Renu Karnad,
Executive Director, HDFC
Considering the importance of housing on the economy, only token references like increasing the target for rural housing units and certain provisions on Section 80 (IB) have been made. FM has a challenging task ahead in mobilising the required revenues to meet all the proposed expenditure requirements in the absence of aggressive disinvestments.

• P Mittal
CEO, Vice Chairman, Ispat Industries
Looking from the perspective of the steel sector, the reduction in customs duty to 10 per cent will make imports cheaper. We should have had bench-marking price before reducing custom duty on steel. Further investment should be made in the industry to increase its capacity instead of encouraging imports.

• Uday Kotak,
Vic-Chairman, Kotak Mahindra
The Budget is bold and forward-looking. His positive approach towards investment is welcome as is opening up of FDI in telecom, civil aviation and insurance. As for turnover tax on securities, a rate of about 0.03 per cent instead of 0.15 per cent may have been more appropriate to ensure it did not affect liquidity.

• A K Purwar,
Chairman, State Bank of India
The Budget is clearly investment-oriented, signalling that reforms are on track. The economy is in a resilient mode and the FM’s thrust on agriculture and rural development will boost growth momentum. Chidambaram has reiterated his commitment to fiscal prudence.