This budget has truly liberated the middle class. It has delivered tremendous freedom to Double income families in the Salaried class. If a couple earn one lakh per month as salary each, the family stays out of the tax net. If the couple earn two lakhs per month each as salary, their combined income will be ₹48 lakhs out of which taxes will be ₹5.63 lakhs at an effective tax rate of 12%.
This year’s budget provides progressive, middle class families freedom like never before, options that bring them closer to financial freedom and a great opportunity to achieve early F.I.R.E.
Young Indians will stay out of the tax net in the early years of their career. They now have a great opportunity to purpose their tax savings towards creating a home corpus. Giving people the option to purpose tax savings towards creating their own corpus will empower them. Earlier the government was playing a part in this process by forcing citizens to choose from its own vehicles like ELSS, NSS, NSC and PPF. Now, that era of force-saving and narrow investing is truly over. Investors have a wider choice, superior options, potential for higher returns and superior compounding from these savings. Earlier, the returns were broadly capped by the nature of choices. Now, the choices before every investor are wider, options are open and prospects are expansive. The onus is now on the investor to strike the right balance between consumption and savings while managing lifestyle and investment effectively. The options for enjoying life in the present will always need to factor in the responsibility of ensuring delayed gratification. This budget empowers India’s young, aspirational, middle class while making them completely accountable for their financial future. The government just got out of the way.