Finance Minister Arun Jaitley has left savers and investors largely alone.

There are three major areas of change in this year�s Budget for them: the first one
is positive but only for senior citizens, one neutral and the third one will seem
negative after a few months.

Senior citizens: There is a bunch of benefits for senior citizens including:

A sharp hike in tax exemption limit for interest income from banks and post offices
from Rs 10,000 to Rs 50,000.

Hike in deduction limit for health insurance premium and/or medical expenditure
from Rs 30,000 to Rs 50,000 under section 80D.

Insure yourself and save tax

Cut down on your electricity bill

Vizio LED Bulbs

Increase in deduction limit for medical expenditure for certain critical illness
from Rs 60,000 (in case of senior citizens) and from Rs 80,000 (in case of very
senior citizens) to Rs 100,000 for all senior citizens, under section 80DDB.

While this is a beneficial move, the procedure to claim these deductions is

extremely cumbersome.

Tax deducted at source is not required to be deducted under section 194A.

Benefit is also available for interest from all fixed deposit schemes and recurring
deposit schemes.

Pradhan Mantri Vaya Vandana Yojana has been extended to March 2020, and has raised
the current investment limit to Rs 15 lakh from Rs 750,000.

This is a great scheme from the Life Insurance Corporation, which guarantees eight
per cent income and should be considered by senior citizens looking forward to a
regular income.

All these are useful reliefs set against the background of falling interest rates
and loss of earning power of senior citizens, most of whom who live off fixed
deposits.

Falling interest rates have been a major cause of resentment for the middle class.

Standard deduction: Another aspect was widespread belief that consultants and self-
employed are allowed to avail of deductions on expenses, but salaried employees get
no such deduction and have to spend money on tax-paid income.

To bring some parity between the two classes, the government has brought back the
idea of standard deduction, a flat figure deducted from taxable income.

The Budget has introduced a standard deduction of Rs 40,000 but has simultaneously
removed the benefits of transport allowance, medical reimbursement and other
allowances.

The net gain might be marginal for the salaried employees, and substantial for non-
salaried and retired taxpayers.
Equity holders: For the past few weeks, speculation has been rife that the
government will no longer allow long-term capital from listed shares to remain tax-
free.

This Budget removes the long-term gains from listed shares from tax-free status
after 13 years.

The finance minister has proposed to re-introduce long-term capital gains tax of 10
per cent on listed equity shares (and equity mutual funds) for gains made exceeding
Rs 100,000, without allowing any indexation benefit.

The tax will come into effect for gains made after January 31.

The cost price will be the high of January 31 or the actual cost price, whichever
is higher.

This substantially protects the humongous gains investors have made in the past few
years.

For example, if the actual cost price is Rs 100 and the January 31 high is Rs 500
and the shares are eventually sold for Rs 700, the 10 per cent capital gain will be
calculated on Rs 200 (Rs 700-500).

The net impact of the change in long-term capital gains will be minimal now but
will really kick in over the course of next year and in future.

The short-term capital gains tax remains at 15 per cent.

The market players were expecting that if long-term gains are taxed, the securities
transaction tax or STT (charged at 0.1 per cent of the transaction value of
securities on both buy and sell transactions) would go.

But this has not happened. STT continues