Budget: How policies impact life

BUDGET AND COMMAN MAN: People have high hopes from Pranab Mukherjee after the election outcome.

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When it comes to our personal finances, the Union Budget is not really worth that much attention. Every year expectations build up that major tectonic shifts will happen that will impact our personal finances.

This year is no different. In fact, the expectations are even higher given the outcome in the General Elections. The usual items populate the wish-list of changes that are being talked about by pundits.

Here’s a quick compilation of items, by personal finance category, that could have an impact on our personal finances. But do keep in mind that not all of these could happen, or happen in the magnitude that they are expected to.

Stocks and Trading

Phase out of securities transaction tax and commodities transaction tax. The impact of this could be that trading could become marginally cheaper than what it is today.

Mutual Funds

Nothing major expected here. The big change, not a part of the Budget, was SEBI’s new policy on zero entry loads for mutual funds, i.e., no more fees paid out of our money to sellers of mutual funds.

Insurance

The Life Insurance Council of India has asked for a separate limit for deduction under Section 80C for long term instruments like insurance. If this were to happen, the impact of this could be that one will get a higher annual amount for your tax deduction.

There is also talk of limiting the service tax on ULIPs to only the fund management charges. If this goes through, the impact will be to reduce the overall charges levied on one’s ULIP.