The Hindu Business Line : Personal investment, taxation: Hopes belied

The Finance Minister has belied expectations that the income-tax exemption limits and the standard deduction will be revised upwards. He has only conceded that these issues will need to be revisited.

In addition, income distributed by equity or balanced mutual funds will now suffer a tax of 12.5 per cent. This is because the benefit of exemption from tax ends on March 31, 2004 and has not been extended.

The Finance Minister has, however, extended the benefit of exemption from long-term capital gains on specified stocks for a further period of three years.

This could ensure that selling linked to claim of exemption over the next 12 months need not necessarily bring the market down as fresh purchases can neutralise any such selling.

Importantly, the rate on small-savings has not been cut. At least until the new government is sworn, post-elections, investors can take advantage of the higher interest rates available on small-savings schemes.

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