Bengaluru-based Sushobhan Chowdhury, 41, is an integrated marketing and growth consultant with 19+ years of experience across Asia Pacific, Africa and Middle East. At present, he is the founder and CEO of That’s aha, a strategic consulting and impact advisory firm providing marketing, design, content and technology advice to companies in India and the Middle East. His wife Saira Samuel, 40, is a media sales professional with 15+ years of experience in India. She currently works for one of the leading television networks, managing the revenue mandate of a specific genre for the Southern region. Sushobhan and Saira have two daughters, Shae and Suvi, who will soon turn 6 and 4, respectively. The couple, who jointly earns over Rs 30 lakh per annum, is looking to save Rs 1 lakh per month for their daughters’ education and marriage and Rs 50,000 per month to build up a retirement corpus of Rs 4.5 crore plus. They have started saving for their goals via equity mutual funds about three years ago. Saira also has a dependent mother.
How will the budget affect their personal finances? Financial planner Rohit Shah, founder and CEO of the Mumbai-based Getting You Rich tells us:
Benefit On Wheels
* The budget focuses on social spending but there’s not much relief in terms of personal finance. The FM has kept personal income tax slabs intact, hence there will be no changes in tax liability. But he has provided for standard deduction of Rs 40,000 for transport allowances and reimbursement of medical expenses. That will add Rs 8,000 to each of their takehomes annually.In Better Health
* Saira can claim health insurance benefits for her mother as the limit of deduction for health insurance premium and medical expenditure has been hiked from Rs 30,000 to Rs 50,000 under Section 80D. This, along with the standard deduction, will marginally raise their combined takehomes by around 1 percent.Back To Square One
* However, the 1 percent rise in the surcharge, from 3 percent to 4 percent, will eat into this increase, effectively leaving them with hardly any positive change in their takehomes.
* However, their incomes will take the biggest hit from the long-term capital gains tax of 10 percent on gains of over Rs 1 lakh. They are looking at roughly Rs 3.5 crore gains with their Rs 4.5 crore plus retirement corpus target. It means they will have a tax liability of about Rs 35 lakh. While they can look at options like investments in low-cost ULIPs (since it seems they aren’t covered with the long-term capital gain change introduced in the 2018 budget), splitting the savings between family members to cash in on the Rs 1 lakh exemption limit and periodically booking profit, these are not the optimum ways and these can help only so much. Overall, they have to raise his retirement corpus target by 8-10 percent.