Introduction: In a fictional conversation between Arjuna and Krishna, the Hon’ble Finance Minister Nirmala Sitharaman’s Interim Budget 2024 is discussed. While no amendments were made to tax rates, the figures presented provide valuable insights for individuals to plan their financial goals and assess their financial position in comparison to others.
Arjuna (Fictional Character): Krishna, Hon’ble Finance Minister Nirmala Sitharaman of our country announced the Interim Budget 2024 on 1st February 2024. What were the takeaways for individuals from the budget?
Krishna (Fictional Character): Arjuna, there was no amendments in tax rates or the tax slab rates in the current interim budget. However, the figures presented in the budget can be used by the common people to plan their personal financial goals and it can also help individuals assess their financial position as compared to other citizens.
Arjuna (Fictional Character): Krishna, what can the individual derive from the change in average annual income in the past decade?
Krishna (Fictional Character): Arjuna, The average income of an individual is expected to be around Rs. 1,85,422 p.a. for the F.Y. 2023-24. This has to be considered a significant rise from average income of F.Y. 2014-15 which stood at Rs. 86,647. With the effect of inflation in any economy a steady rise in average income is required to tackle such inflation and maintain financial stability. Individually one shall first satisfy himself that he is earning above the average income. Once the first target is achieved one can determine the sufficiency of income depending upon their individual financial goals.
Arjuna (Fictional Character): Krishna, what changes have been observed in income tax payers and its collection in past decade?
Krishna (Fictional Character): Arjuna, The number of taxpayers in our nation has significantly increased, which is great for our economy. Taxpayers play a crucial role in supporting the country’s growth plans. From 4.95 crore in 2013-14, the number has almost doubled to 8.9 crore in FY 2022-23.
This rise is positive, but we still have work to do since these numbers are less compared to our total population. Efforts are being made every year to increase the number of taxpayers. It’s important to continue these efforts, ensuring more people contribute to the economy for a stronger and more prosperous future. Everyone shall assess their personal income every financial year in light of due tax liability and should contribute to the nation’s growth through disclosing correct income paying tax liability.
The personal income tax collection has also seen a significant rise from 2.42 lakh crore rupees in FY 2013-14 to Rs. 8.33 lakh crore in FY 2022-23. The increased tax collection allows the government to maintain their foreign borrowings in control. The figures currently are significant however considering that only small portion of the population actually pays income tax there is still potential for this government revenue to rise in future.
Arjuna (Fictional Character): Krishna, which area has proved to be the most beneficial for investors in the past decade?
Krishna (Fictional Character): Arjuna, The stock market has reached new heights in the past few years and continues to be one of the most promising area for long term investment. SENSEX has yielded an average return of 13.59%p.a whereas NIFTY has given average return of 13.3% p.a. in the past decade. The most beneficial investment though has been the investment in Gold Bond which has given an average return of 13.7% p.a. to the investors in the past 8 years and has emerged as the new front runner. Fixed Deposit has been giving 7.39% yearly returns and Real Estate has been giving 4.8% annual returns in the last decade. The most underperforming investment has been the money in Saving Account which has only yielded a return of 3.3% p.a. which is less than the annual inflation rate. Individuals shall focus on long term investments and shall study all the related risk and rewards of their investments to ensure a safe and healthy growth of their money.
Arjuna (Fictional Character): Krishna, what should one learn from this?
Krishna (Fictional Character): Arjuna, the budget has not brought any amendments in tax rates or the income tax slab rates. However personally we can learn a lot from the information obtained from the budget. Our personal financial goals shall be thoroughly considered by all of us, and we shall ensure ourself of our financial stability and growth of our money with the presence of inflation. Incomes as well as Income Tax Payers have increased in the last decade which is great sign for the economy, however it is a common understanding that there is still a lot of ground to be covered. Individuals shall take the responsibility and shall not discharge their duty towards the nation but also plan personal finance thoroughly to ensure that financial goals are achieved.
Conclusion: The conversation delves into the changes in average annual income over the past decade, the increase in the number of taxpayers, and the rise in personal income tax collection. Krishna emphasizes the significance of contributing to the nation’s growth through tax compliance. The discussion also highlights the promising areas for investment, with the stock market, Gold Bonds, and long-term investments proving beneficial. Overall, the takeaway is the importance of thorough financial planning and responsible contribution to the nation’s progress.
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