Union Budget 2012 and impact on the common man

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 Union Budget 2012 and impact on the common man
The Union Budget 2012-13 will leave individuals, especially the middle class poorer. Though the Finance Minister has raised the tax exemption limit to an income of Rs 2 lakhs, the manner in which he has raised excise and service tax nullifies the tax exemption limit.

Now every time you decide to dine in a restaurant you would have to pay higher service tax. Service tax has moved up from 10% to 12%, which means that consumers would have to pay a whole lot extra for a range of services from buying a house to air travel

Refrigerators, airconditioners, microwave owens and other consumer durables and electronic products are slated to become costlier as excise duty sets in.

Increase in excise duty is also going to have a cascading effect on a range of products including automobiles. Therefore the small benefit that the Finance Minister has given by way of increasing the base tax slab will be nullified by the excise and service tax.

A section of industrialists believe that the Union Budget 2012 will lead to inflation in the economy. The Middle class has had to already contend with high inflation last year, and steep interest rates, which has led to lower disposable incomes.  The excise and service tax high is only going to leave them poorer.


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