And its time to budget yourselves with Budget 2013

At the first glance, the budget this year may appear harmless to the middle class, but make no mistakes, it will bite the common man in more than one way. Of course, if you read the fine print! Let’s examine what some of the things he has given...

P. Chidambaram announced a tax credit of Rs 2,000 for persons with income up to Rs 5 lakh. He said, it will benefit 1.8 crore tax payers entailing a revenue sacrifice of Rs 3,600 crore.

Securities Transaction Tax on mutual fund redemptions reduced from .25 percent to .001 percent. In the equity futures segment, STT would be brought down to 0.01 per cent from 0.017 per cent. Little relief for those who invest in Mutual Funds and shares. First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 Lac. Apart from the current deduction of 1 Lac 50 Thousand. Congrats to those who are yet to buy their first home!.

Income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme is raised to Rs. 12 Lacs from Rs. 10 Lacs. This benefit is now extended for 3 years from the current provision of 1 year. Good news for those who do not have a demat account or never traded in shares or bought mutual funds through a demat account.

Now, lets’ examine what all he has taken away...

Buying a Nice House? Pay 1% more - Property transactions skewered; TDS of one percent where transaction exceeds Rs.50 lakh. Sorry, a nice home would now be little expensive!.

Pay more to eat? As it will cost you 12% more due to service tax on all air conditioned restaurants regardless of whether or not they serve alcohol. Convince your family to have a good meal but at a non - air conditioned restaurant!

Nice way to recover the so called revenue sacrifice - Ten percent surcharge on income exceeding Rs.1 Crore (Rs.10 million/$180,000) a year; only 42,800 people have declared such income, very surprising! However, Chidambaram did a good job by trying to recover a decent portion of what he gave by way of Rs.2000 tax credit to 1.8 Crore tax payers.

Pay more to watch - Finance Minister has doubled the import duty on set-top boxes to 10 per cent making them costlier. The four metros are now compulsorily digitised for cable connections

Pay more to talk - smart phones or phones priced more than Rs.2,000 will now become pricier with the sharp rise in excise duty to 6 per cent from 1 per cent

Pay more to travel - Diesel will see a sustained rise in price if global oil prices do not retreat as the allocation made for fuel subsidy is also lower which means that the Centre is moving towards freeing prices of petroleum products. Remember, your rail travel has already become costlier courtesy the railway budget.

Pay more to cook – With freeing prices of petroleum products, the cooking gas might prices are set to rise..

No real savings – Effective tax saving of 6.47% for those who earn upto 5 Lacs as the FM has allowed a tax credit of Rs. 2000, but this is not real courtesy the growing inflation. To make it more effective, FM should have enhanced the Tax bracket instead of offering a paltry Rs. 2000. Let’s compare the personal Tax scenarios of current and next FY –

Therefore, whatever Chidambaram’s famous poet Thiruvalluvar says "Kalangathu Kanda Vinaikkan Thulangkathu Thookkang Kadinthu Seyal" (which means,"What clearly eye discerns as right, with steadfast will and mind unslumbering, that should man fulfil.") For Aam Aadmi it is a budget with some pain and hardly any gain

This article was also published in "Chatterpiller", the newsletter of Carma Connect