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'GST should have been implemented long ago'

Last updated on: July 09, 2009 16:51 IST
Union Finance Minister Pranab Mukherjee marginally raised the Income Tax exemption limit, abolished Fringe Benefit Tax and Commodity Transaction Tax and announced some schemes to benefit the aam aadmi.

The reaction to the Budget was varied: the Opposition blasted the Budget, the industry captains hailed it, and the Sensex plunged by 870 points on Monday.

What exactly does the Budget hold for the common man? Will you benefit from the Budget proposals? Or do you really don't care? How does it affect you?

In an hour-long chat on on Thursday, DCW chairman Mudit Jain replied to many such queries. Here is the transcript:

umeshnayaks asked, Is There any services tax for goods transport
Mudit Jain answers,  at 2009-07-09 12:23:46Yes there is service tax on goods transport.
gagan asked, is MAT applicable on industries in Himachal Pradesh
Mudit Jain answers, Yes
yogesh asked, There is no more gain for the stock is going down only..what would u say
Mudit Jain answers, markets should go down even further
mohd asked, will the prices of comodities like rice,pilses,cerals come down
Mudit Jain answers, budget does not give any benefit or negative.
upendra asked, What will be the impact of this budget on common man.Will this improve indian economy?
Mudit Jain answers, negative impact
meet asked, Hi sir, Can u plz let me know the source for fiscal deficit? and also fm has not mentioned about disinvestment and fdi.
Mudit Jain answers, profligate spending by the government on waiving of agricultural loans and negative return on psu's
hemant asked, is there any new section is being introduced by abolishing FBT.
Mudit Jain answers, FBT is being replaced on a tax on perrequisites. Details are expected.
kanavkhera asked, hello sir when the issue of disinvestment by govt will take into action
Mudit Jain answers, Will have to wait for further announcements by the government
Mudit Jain answers, It will perform poorly due to mismanagement of the economy by the govt.
Mudit Jain answers, It will perform poorly due to mismanagement of the economy by the govt.
uma asked, What they mean by fbt obolishment
Mudit Jain answers, FBT need not be paid by employer and is removed.
SatishK asked, What's in it for a common man other than the Rs 10,000 Increase in IT Slab?
Mudit Jain answers, nothing
PagalAadmee asked, Dear Mudit , Do you feel this Budget is good for AAM AADMEE?
Mudit Jain answers, no it is terrible.
PagalAadmee asked, Dear Mudit , Do yoy feel this Budget is good for AAM AADMEE?
Mudit Jain answers, 
gagan asked, what will be the effective rate of MAT now?
Mudit Jain answers, MAT is increased to 15% from 10%. Effective rate will vary from company to company.
g asked, Who will benefitted by abolishing FBT???? Is it Employee or Employer?
Mudit Jain answers, Employer benefitted.
apradhan asked, My company is giving benefit of mobile phone and petrol allowance. It will be effect in my income tax?
Mudit Jain answers, Yes you will be taxed on perrequisites given to you by your company
nisha asked, Would post office interests (on MIS, RD etc.)come down like declining bank interest (on FDs) ?
Mudit Jain answers, interest rates are coming down and will impact post office investments also.
Ashok asked, Whether home loans will have any impact on this budget?
Mudit Jain answers, no impact. But declining interest rates should decrease home loan rates.
asg asked, What will be the effect for fringe-benefit become taxable?
Mudit Jain answers, Employee will have to pay on perrequisites given by company.
uju asked, i m salried person, so wht it's for me only 10k increase
Mudit Jain answers, Yes only 10,000 increase in limit.
datta asked, what was given goverment t public
Mudit Jain answers, 
kkk asked, which are the perquisites are covers under tax to be paid by the employee now?
Mudit Jain answers, car, telephone, club, club fees, mobiles, etc.
Mudit Jain answers, very bad because did not suggest any reform.
askbalancer asked, Good anoon sir!what is meant by L shaped recovery of economy as its described for US?
Mudit Jain answers, economy from going downwards will remain flat and stable.
Mudit Jain answers, no change in tds rate. Salary deduction hiked by Rs.10,000/-.
RAJ asked, As Tax Holiday to Oil & Gas Sector was extended, will there be any positive impact on Reliance Natural Resources Company..More over we need to hear verdict from Supreme Court regarding gas sharing policy between RIL & RNRL...How will be stock price of RNRL in Short & Long term
Mudit Jain answers, It should have positive impact and it is necessary. In the long run prices of REliance group should go up not in the short run.
krishna asked, What is the effect of budget on real estate in mumbai
Mudit Jain answers, no impact
VENUGOPAL asked, Sir, My Monthly income 47,000/- What is New tax for the year 2009-10?
Mudit Jain answers, only surcharge is removed of 10% and 10,000/- limit is increased.
kkk asked, do we have to pay any tax on reimbursables from the company ?
Mudit Jain answers, On perquisites
kumar asked, I get vehicle reimbrsement fromcompany and get aroung 94% money after 6 % Tax as FBT. What will happen now and from when?
Mudit Jain answers, You will be taxed on the same in your hands.
hebbar61 asked, Why is it that no Govt wants to increase the IT Exemption limit? The increase in exemption by Rs 10K takes away more than what it gives, with the increase in price of Petrol and Diesel.
Mudit Jain answers, I agree with you. Because of poor management and leadership they do not reduce taxes.
gagan asked, When GST will come into effect what will happen to Excise exemption of HP and Uttaranchal
Mudit Jain answers, As of now 1st April 2010. It will not matter.
susuhil asked, HI Sir, HR U i m a govt employee, how far the budget is helpful to me
Mudit Jain answers, No it is not helpful to anyone.
ankit asked, hello sir, i am B- school student. this year will be going for placement. so how does this budget impact me
Mudit Jain answers, Markets will be down and job hunting will be diffciult.
pranabnag asked, Everybody we have expected to raise the Investment limit of 80C for tax deduction upto Rupees atleast 1.50lack
Mudit Jain answers, Yes it should be higher but has not been done.
kkk asked, does Super Anuation will attract any tax to be paid by employee??
Mudit Jain answers, Yes it will be considered a perquisite and taxed on the employee.
p asked, nda govt had brought down interest rates but pf post office small savings rates remained pegged at 8% will they go below this
Mudit Jain answers, It could go down.
krishna asked, Is property rate are going to increase or stabalised or getting reduce ? after budget
Mudit Jain answers, property prices should go down because the economy has not been rejuvinated by the budget.
mnm asked, Sir, who will be benifited MORE by this budjet.... higher class, a middle class or a lower class person?
Mudit Jain answers, No class is benefitted by the budget only the government of India.
mayank asked, Sir, from this budget how i'm benefited on tax saving persay.
Mudit Jain answers, No benefit.
AMol asked, how will you rate this budget out of 10
Mudit Jain answers, Zero on ten
kkk asked, do we have to pay any tax on reimbursables from the company ?
Mudit Jain answers, Yes. Details are awaited.
vinay asked, hello, In my company ,FBT on medical reimbursement and Telephone bill reimbursemnt is paid by employee @ 6.978%,so now FBT is abolished ,no need to pay from this year?
Mudit Jain answers, You will have to pay tax now instead of company.
seeker asked, what about home rates in mumbai? should be expect further corrections?
Mudit Jain answers, should come down due to sluggishness of economy.
uju asked, in budget examption limit r increase for senior citizen, wht it's impact for that, they earn only from pension but for common man or salries person for nothing only 10K , its not justifed
Mudit Jain answers, Your limit has been increased by Rs.15,000/- for senior citizens.
Karan asked, I have done some investments in private companies and getting my returns without TDS from different companies. How I should pay Income tax in this case?
Mudit Jain answers, You have to pay income tax on these returns and not set it off against TDS.
PagalAadmee asked, Dear Mudit, Your view on Budget seems very harsh.Any specific reason?
Mudit Jain answers, We have to change our way of thinking and tax less and get more benefits like western countries.
PagalAadmee asked, Dear Mudit, Your view on Budget seems very harsh.Any specific reason?
Mudit Jain answers, 
rp asked, after the proposed removal of FBT and back door entry of perquisites being added to salary, how is the situation different than before FBT was introduced?
Mudit Jain answers, Earlier employer paid tax now employee will pay tax. the government gets the tax anyway.
Jagan asked, HI With the Surcharge removed what will happend to the education Cess and other one that were calculated as a % of surcharge?
Mudit Jain answers, Education cess continues. Surcharge is removed only for individuals. It continues for corporates.
kkk asked, how about the pf contribution from the employer will get treated.......whether we employee need to pay tax on that even?
Mudit Jain answers, No
ajay asked, i am a PSU employee and residing in colony accomodation. what will be the impact of FBT clause
Mudit Jain answers, You will be charged tax on the rent free accomodation.
Mudit Jain answers, It will make it worse and there is no hope for any Indian.
kkk asked, does Super Anuation will attract any tax to be paid by employee??
Mudit Jain answers, Yes will be paid by employee
trushil asked, Hi, I am covered under s. 194J (salaried professional) of Income Tax Act. I would like to know the tax rates that I would be subjected to.
Mudit Jain answers, It will depend on your income. Surcharge on tax is abolished for individuals.
rameshan asked, had bjp been here around, it would have been a great budget. dont u think so?
Mudit Jain answers, 
bna asked, FBT scrapped and coverted in form of Perquisite tax.Is it aplicable from Apr 2009? Will they reverse the FBT paid by employer for say ESOPS ini last 4 months and ask employee to pay for it??
Mudit Jain answers, We have to wait for FBT on reversal on ESOPS. NOt clarified in budget.
VIVEK asked, can u tell me about some criticism against budget
Mudit Jain answers, Has not addressed issues of overspending by govt. and also poor returns on psu's.
hsgururaj asked, Regarding FBT, it was being deducted from my CTC (6%), how will I be paying more now?
Mudit Jain answers, You will not be paying more as you will be paying instead of the company. company deducted from you and now you will pay directly.
AMol asked, what is your views on proposed GST?
Mudit Jain answers, GST should have been implemented long ago and it should cover all items without any exemptions. CST has not been reduced by 1% has it should have been done from April 2009.
jjjjjjjjjjjjj asked, I plan to invest in MFs and Stocks should i do now or market will go down further till 12000
Mudit Jain answers, Wait for market to go down further.
Ravindra asked, what's the effect on market because of budget and how?
Mudit Jain answers, Markets have come down and will come down further because the budget did not address basic and fundamental reforms like disinvestment, lesser taxation, curtailing govt. spending etc.
sujjukrish asked, Please suggest best options for investment apart from market
Mudit Jain answers, Only FMCG companies
Narahari asked, Hello sir, Does food coupons like sodexho and meal vochers comes and FBT and they are taxable now?
Mudit Jain answers, It should be taxed in your hands
khushisingh asked, What is the impact of removal of the FBT? Does it mean that the car running allowance that the company gives as a re-imbursement is now tax-free or is it fully taxable?
Mudit Jain answers, Car allowances will now be taxable in your hands.
Nattamai asked, Hi What is the purpose of implementing Service TAX + VAT. Why this double taxation. Will it burden the customer
Mudit Jain answers, Service tax is central govt. and vat is state govt. By levying vat taxes have got reduced. You are right there should be only one tax and not two.
hardeep asked, What is the status of Service tax on rented commercial building
Mudit Jain answers, You have to pay service tax as before.
Chaitanya asked, What would be the job scenario in the coming year?
Mudit Jain answers, Job scenario will be even more difficult in the coming years.
ajay asked, Sir, i received Rs. 3-4 thousand interest in my saving account in this year, should i pay tax on this amount ?
Mudit Jain answers, You hve to pay tds and apply for refund or claim it in your deductions.
Mudit Jain answers, very unlikely should come down further.
au asked, i pay for Coupon as a part of My CTC, plus we get reimbursement of internet would that come under FBT?
Mudit Jain answers, You will have to pay tax on it.
v1 asked, Does removal of FBT mean it increases burden on the Employee for all the fringe benefits?
Mudit Jain answers, Yes it does.
v1 asked, Does removal of FBT mean it increases burden on the Employee for all the fringe benefits?
Mudit Jain answers, 
vxvx asked, Mr. Mudit sounds very anti congress. While many people see this as a positive budget and good for India in the long run, he is simply trying to project it as a failure. I guess he doesnt understand finances that well. Budget is not only for the common man, it is also made from the perspective of the country's growth
Mudit Jain answers, I am neither anti congress or pro BJP. I am pro India and anti govt.
khushisingh asked, If my salary goes above the limits of 5 lakh PA, and then I get additional car running allowances of 1.2 LPA, will I have to pay 30% of 1.2 LPA as tax? or will it be charged at the same rate as it was in the case when FBT was applicable?
Mudit Jain answers, We have to wait for government clarification on taxes on perquisites rates.
bna asked, Do you think some of budget proposals be reversed / changed in due course of time... You think Govt will feel the heat due to any of its proposals?
Mudit Jain answers, It can be but very unlikely.
mustaq asked, I owe a car can i reimburse the petro bills from my company and upto what extent
Mudit Jain answers, You can get reimbursement upto any extend but now will have to pay tax on it as a perquisite.
Arun asked, You contracdicted urself about Real Estate. In one answer you have said property rates will fall and in another answer you sais that theres no impact on the real estate sector !!
Mudit Jain answers, Yes. Budget has not impacted real estate either way. The econo,y will not improve and that's why the prices will fall.
Ash asked, Hi. PLZZZZZZ TAKE THIS QUESTION..I AM TRYING SINCE CRAZY LONG... I am working overseas and my indian package gives me a reimbursement of around 35000 INR on which I only pay FBT. My monthly take home is over 1 lac including this reimbursement. Please let me know what impact would it create on my take home as this FBT is not applicable anymore. Plz clarify about tax part.
Mudit Jain answers, You should not be paying FBt your company should be paying it. Now you will be paying tax on perquisites and your take home pay will be lower.
Priyank asked, Sir, On one hand disinvestment is being suggested for overcoming liquidity crunch and on other hand its in the news that the interest rate may go up so that excess liquidity need to be soaked up from the market. Or is it that the government is confussed as to what to do?
Mudit Jain answers, Disinvestment should be increased at a much faster rate. Interest rates should go down due to sluggish economy.
Lobby asked, SIr do Rediff pay you for this information which you are answering or its free of cost..?
Mudit Jain answers, I do it free of cost. No one charges for such chats. It is a service. We are not govt. of India who charge for everything.
Santanu asked, Hello Mudit .. Just now we got a report that Recession is over and India is going to Boom. But your vision is different . Any comment on this ?
Mudit Jain answers, Recession is far from over and India is far from booming
sudhindra asked, Sir, what is the impact on onions in this budget?
Mudit Jain answers, It will go up due to diesel price going up and service tax on transporters scope being increased.
employee asked, sir, which type of investment is better - NSC or PPF?
Mudit Jain answers, PPF
Mudit Jain answers, It is 15%. Yes it can.
vdora asked, Don't you agree that govt has fallen short on health-care measures? Well, on a lighter note, it was quite evident with pranab's flu during the session
Mudit Jain answers, Yes it has. We have no social security and free education unlike in the western countries.
rcd007 asked, Do you think, Choosing Pranab Mukherjjee as a Finance Minister is a blunder by the Congress Govt?
Mudit Jain answers, They must be more reform oriented.
sujjukrish asked, Gold investment not a best option as of now?
Mudit Jain answers, Yes because it will be taxed.
Mudit Jain says, my pleasure chatting with you. goodbye now.