So the Budget 2018 is out. As always, it was eagerly awaited. For some reason, I was super busy yesterday at work, so I kind of missed watching or reading live updates, but my dear friend Appy – an engineer by profession but an excellent Investment Planner by interest, barraged my phone with Budget messages. I did not check it until later in the evening, and when I did, I just could not stop laughing out loud. Her anger had taken a very different shape and angle – humour and sarcasm on herself plus hilarious comments on the probable future.
I decided to call her; when I spoke with her, oh my…there was anger, anxiety and sadness in her voice to the extent half the time either she sounded stern or tried to choke back tears. Post her MBA from a very reputed academic institute, she has put her heart and soul into investment planning, not just for herself, but she helps her entire friend circle making the right financial and investment decisions.
And the budget says – LTCG on equity 10% tax applicable on above one lakh investments.
Hmmm, no wonder Appy and many like Appy were in tears.
So far from whatever I have read, discussed and understood, the Budget no doubt appears to be good at macroeconomic level. However, at individual micoreconomic level, it looks difficult for any common average salaried middle class Indian citizen. Challenges that I have personally faced are…
- First of all, it is extremely difficult to get a good job.
- Second, considering the economic scenario despite you have the best of qualifications and experience and repeatedly proving yourself, to get a great CTC is very difficult as companies talk about economic scenario, possible crisis and proactive solutions.
- Of the CTC (Cost-to-Company) you get, the limit under 80C section (PPF, Life Insurance, Fixed Deposits, etc.) to invest is only INR 1.5 Lakh – not enough to save for the future when you will be aged, cost of living will be higher, and there still will be many many bills to be paid.
- Considering investing in other sections – 80CCC, 80CCD, 80D, etc. like Medical Insurance, Medical Bills, National Pension Scheme, Home/Education Loans, etc. – still, there isn’t enough provision for a salaried person to save money.
- So the best possible safe (or say low risk) way to increase money was Long-term Capital Gains (LTCG) in the form of mutual funds and various other SIPs (Systematic Investment Plans) that so far had no tax on income earned.
- However, with this Budget, now that gain is a once-upon-a-time-story.
- Demonetisation and GST (Goods and Service Tax) application had already taken a toll on many, and now implementation of tax on long-term investment gains…hmmm…doesn’t look and feel very good.
So coming back to Appy, she has started exploring other options for profitable Investments.
As for me, I am an Indian who wants to see my country developed – ‘develop’ with an ‘ed’ not ‘ing’.
If the Fiscal Deficit will go down, if the farmers will benefit, if rural India will develop, if health and education will be made available to all, if country will be technological enabled in beneficial ways, and if the tax I pay from my hard earned savings will be utilized without it falling in the trap of corruption, then yes, I support the Budget.