Finance Minister P Chidambaram has done it -- won the hearts of young salaried individuals, that is!
In the Union Budget 2008-09, the Finance Minister has raised the income tax exemption limit for women from 1.45 lakh to Rs 1.80 lakh and for men from Rs 1.10 lakh to Rs 1.50 lakh.
"The Finance Minister seems to have brought smiles to everybody's faces, not just salaried individuals," says Gautam Sheth, 24, a correspondent/ copy editor with DNA and an individual who falls within the 30 percent tax bracket. "Mr Chidambaram has definitely created a buzz with his budget proposal of raising the IT exemption limit. Of course, there will always be critics who will try to find fault with this year's budget," he adds.
"It's an excellent step," quips 24-year-old Sumit Kar, himself a salaried individual and a section officer at the Principal Accountant General's office in Kolkata. In fact, he was surprised with the Rs 40,000 increase in the exemption limit. "I was not really expecting the hike to 1.5 lakhs. I thought the Finance Minister might increase the exemption limit to somewhere within the 1.25-1.3 lakh range. Everyone is happy."
Sonali Talwalkar, 33, who works in the HR department of Talwalkar's Gymnasiums and falls under the 30 percent tax bracket, agrees. Although she was expecting a raise in the exemption limit for women upto Rs 2 lakh, she believes that "something is better than nothing".
So what will she do with the extra money she has now? "Being a mother of two, I will save the extra amount for my children," she says gratefully.
But how much will the proposed raise in exemption limit help salaried individuals, both men and women? Here's a brief illustration created by expert Mahesh Padmanabhan of RelaxWithTax:
Depending on the tax brackets, Mr Chidambaram's bonanza will help save anywhere between Rs 4,000 to Rs 44,000 for men and Rs 6,500 to Rs 43,500 for women.
But the young at heart are also aware that the Finance Minister has doled out the goodies with one eye on the general elections due in early 2009. Says Nityashjit Kaur, 24, a law associate at Dua associates in New Delhi: "Though the increase in exemption limit is a help to some extent, I think it has been introduced with an eye on the general elections due sometime next year."
She says if Mr Chidambaram really has to improve the lot of salaried people in India, then he needs to think long term. Nityashjit's friend Ruchi Malhotra, 25, working in the same law firm, concurs. "But of course, the move will put more money into the hands of salaried professionals and people like us will have higher purchasing power. This will also help boost consumption, which is like killing two birds using one stone," she remarks pointedly.
Both of them, however, are happy that they will now have more money to spend and save.
Gautam feels that it does not matter whether the Finance Minister's intention is political or not. "How does it really matter?" he asks. "So long as we get more money in our hands!"
Like everyone who spoke to Rediff.com, Gautam too, will splurge a little cash. "I am going to spend a good amount of the money I save on luxury items!" he declares.
Raghu Iyengar, 31, a call centre employee working with Wipro Limited, has the last word and puts the matter in proper perspective.
"I will be able to save a lot of money now as I fall within the 30 percent tax bracket. The Rs 10,000 increase in IT exemption in last year's budget was marginal if one compares what the finance minister has done today. I am going to spend the extra money that I will get!"
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