For general tax payers, the measure will result in "a uniform tax relief of Rs 2,000," Mukherjee said. But our FM isn't naive. He might have got a thumbs up for giving the common man this relief, but do you realise that you will actually end up spending more than you save?
On the surface, increasing servicing tax to 5% from 3% doesn't seem high. But given that need-based spending has increased steadily over the last few years, you are now burdened with more indirect taxes than the direct tax you pay.
A report in Economic Times says,
"Discretionary spending has increased from 35% of the average Indian household consumption in 1985, to 52% in 2005, and 58% in 2009. As incomes rise, we tend to spend proportionally less on basic necessities and more on discretionary items. Add to this the excise duty that we pay on most consumption products."
So apart from paying more on hotels and hospitals, you would end paying more on your apparels, Jewellery, food items, entertainment and host of other things.
So instead of celebrating, it is time for you to sit down and calculate how much you should invest wisely to save something.
