“Populist”, “For the next general election not next generation”, “Poll Vault”… aren’t you sick and tired of these headlines by now? Yes, Budget 2008 might have been designed to garner votes, but does that make it a bad one for you? The only question that really should occupy investors and taxpayers is: has the Budget made me richer? And this year, the short answer to that is, “Yes”.

The finance minister has not only ensured that your post-tax income rises by up to 8% depending on your income level and category, he has also tried to reduce your expenses on certain items of consumption. The question is not whether you have gained, but by how much. Of course, the macroeconomic and political repercussions are all very interesting, but they make little actual difference to your wallet. At Money Today, we decided to cut through the clutter that invariably surrounds the Budget.

All that you’ll read on the following pages will be simple and utilitarian. We show you how much you can save in taxes, no matter what your income. Because the markets always react immediately to the Budget, we thought it appropriate to take a look at those sectors that will be affected by the Budget provisions.

However, there are several factors other than the Budget that should guide your investment decision. Our columnist Dipen Sheth fills you in on some reasons (other than the Budget) why you should consider equities. On page 17, we have created a household budget that will help you keep track of income and expenses.

Measure the gains and maximise them

I believe that trust will beget trust, moderation will beget revenues,” said the finance minister as he began his proposals for direct taxes. And there was definitely moderation— under the new tax exemption limits, every assessee gets a tax relief of at least Rs 4,000.

Those who plan their tax saving investments, women and senior citizens automatically save more in taxes. But what exactly do you save and how can you plan your investments to save the maximum possible from the taxman? That’s what we attempt to show you on the following pages, where, in association with Ernst & Young, we have created a series of tables that illustrate how best you can save taxes. But before you turn the page, read the accompanying box, which puts the basics in place.

Before you plan your Tax

Know your income...

Salary: all income received from an employer Income from business/profession: profit from business or consultancy

Rental income: income from letting out a property

Capital gains: profit earned from sale of an asset (property, jewellery, shares, car, etc)

Income from other sources: any other income, including interest, dividends, pension, gifts, etc

... and tax saving options under Section 80C

Contributions to EPF and PPF, Investments in NSCs, bank FDs of over 5 years, Life insurance policies, including Ulips, ELSS mutual funds, pension plans, Children’s school fees, Repayment of home loan, Senior Citizen’s Savings Scheme and Post Office term, deposits of over 5 years.