MK Balaji, based in Adyar, Chennai, has always been a sales professional at heart. But his interest in financial products landed him a job in the financial services industry, where he works currently.  

Balaji followed the budget closely this year, as expectations ran high on tax concessions for the middle class as well as a rejig in capital gains tax – both of which came through on D-day. Balaji looks at the changes pragmatically. He sees no reason to be elated over the tinkering of tax slabs under the new regime, as well the increase in standard deduction, he says, as he still pays taxes under the old regime.

“While I do understand that one day the New Tax Regime will be the only option available, I receive HRA benefits, and the old tax regime lowers my tax outgo presently.” He is not worried about missing out on the standard deduction, which is further enhanced now. But it may mean a lot more to his wife Vidhya and he expects her to benefit from the lower tax incidence due to the changes in the new regime, which put more disposable income in her hands.

In this context, the reduction in import duties on gold, silver and platinum is something his better half can cheer about as it is expected to bring down the gold prices. Balaji is a big investor in equites, but has so far not taken a plunge into real estate. He looks at the changes in capital gains tax more as a “streamlining process” without getting much agitated about it.  

Given the elevated market valuations, he has and continues to move a bit out of equites into cash/ gold and he does not see any change in his asset allocation pattern because of the changes in the budget. That said, one of his friends did the math and felt that the removal of indexation benefit for capital gains on sale of property seen in the light of a lower tax rate imposed does not cause a big impact, unless it was a really old property.

For his 4.5-year-old son Sathvik, Balaji hasn’t started investing yet in right earnest. He, however, would prefer SIPs. “I do agree that NPS Vatsalya for minors is another long-term investment option for children along with products like Sukanya Samriddhi for the girl child. But I would not prefer to get into products such as the NPS that require long-term lock-in at this juncture. I am comfortable starting SIPs in mutual funds for him and its liquid nature will help me make some tactical calls as well, as I track the markets closely”.

Overall, Balaji, makes two observations. One, he is really happy that from a focus on infrastructure and being “corporate centric” in the last term, the government is focusing more on rural India and the common man now. Secondly, he does feel that more measures can be taken to ease the life of the common man, by making compliance across laws easier, closing the loopholes and cutting red tape, wherever necessary. “After all, personal income tax collections are exceeding corporate tax collections and the aam aadmi needs to be rewarded for being honest and compliant”, he concludes.