You get less fuel for more money
For a very long time, fuel has been the government’s favourite whipping boy. With crude prices weaker, it has become a lot simpler because the government is just skimming away the gains. The budget has increased the special excise duty on petrol and diesel and the infrastructure & road cess by Rs1 each. With prices now being reset by the OMCs on a daily basis, the impact of Rs2.40 on petrol and diesel was felt the next day itself. Get prepared to load less fuel when you swipe your card next time.
Your jewellery just got a little costlier
Even as gold prices have rallied by nearly 25% in the last 1 year, the budget has given the compulsive jewellery shoppers one more reason to worry about. The customs duty on gold has been increased in the budget from 10% to 12.5%. Most jewellery companies have already affirmed that they will be passing on the higher cost to the customers. So apart from paying more for gold, also get ready to pay higher duties on gold.
Pay more for a host of lifestyle products
Lifestyle products are normally easier to tax as the demand tends to be inelastic. The budget has hiked the customs duties on a host of lifestyle products including vinyl flooring, marble slabs, IP cameras, digital video recorders, etc. The intent here is to protect the domestic manufacture of these products but in the process you will end up paying more.
Sin products get costlier; which is hardly a surprise
Tobacco products, cigarettes and hookahs are likely to become more expensive. The National calamity cess on these products was disputed by the manufacturers as there was no excise duty. To address this anomaly, the budget has imposed a nominal excise on these products, making them costlier. But, no complaints, as these products are best avoided.
Electric vehicles will now be cheaper
Electric vehicles, still a nascent industry, will benefit from the budget in multiple ways. The customs duties on EV parts have been reduced and the budget has asked the GST council to reduce the GST on EVs from 12% to 5%. In addition, there is tax break of Rs1.50 lakh on EVs purchased on loan. Apart from purchase price, even your effective cost comes down.
Effective cost of affordable homes will be lower
If you plan to buy an affordable home (up to Rs45 lakhs), your IT exemption under Section 24 goes up from Rs2 lakhs to Rs3.50 lakhs per annum. That will make a big difference to the effective cost of owning an affordable home; depending on the tax bracket you are in.
Digital transactions set to become cheaper
With the intent to boost digital money transfers, the budget has scrapped MDR and other charges on digital money transfers. The RBI and the respective banks will not charge for digital transactions and the costs, if any, will be absorbed by the respective banks. So, for digital money, this budget is a big boost.
Electronic input devices become cheaper
With a view to reducing the cost of electronic input devices, the budget has cut import duties on products like camera modules, mobile phone chargers, set-top boxes, etc. The idea is to make domestic manufacture more competitive, but you surely stand to gain from these duty cuts in the form of lower end-price.
The tax proposals have been largely progressive in nature. While skimming off the lifestyle and sin products, the budget has sought to promote more of its macro focus areas. That is not a bad deal after all!