Those of you waiting to make a quick buck on exercising your ESOPs (employee stock option plans) may have to share some of your profits with the taxman. Under the new rules proposed in the Budget, ESOPs will now be treated as fringe benefit and taxed accordingly. However, more clarity on such aspects as determination of the value of ESOPs, the rate for FBT etc. is awaited.
PAN made THE sole identification number
Be ready also with your PAN (permanent account number) card every time you invest, as the Budget proposes to make this the sole number for financial market transactions. Though various broking houses had already made PAN mandatory for trading in stocks, you can now use it for investing in mutual funds too! This essentially means that the previously proposed MIN (mutual fund identification number) is no more a must for mutual fund investments. Making PAN the sole identification number not only saves you from a lot of paper work, but would also help the government keep a close watch on your investments. With PAN becoming the most important number ever, those of you who have still not applied for a PAN, get cracking.
Tax deductions on education loans
Thanks to the new amendment introduced in the Budget, you can now get a tax deduction for educating your spouse or children! The proposed amendment allows you to deduct the amount that you pay as interest for the education loan (for your spouse or children) from your gross total income.
The facility was hitherto available only for the individual who applied for the loan. It is to be noted that the deduction would be available for eight assessment years beginning from the year in which the payment of interest on the loan begins. However, since the amendment would be effective from April 2008, you can avail yourself of the facility from the assessment year 2008-09 only.