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Keywords: Subhash Lakhotia, Chat

Subhash Lakhotia has been an income-tax practitioner for over 25 years. He is the Executive Director of R N Lakhotia Investment & Taxation Consultants, Director of Studies of Lakhotia College of Taxation & Management and Editor of Tax Saver, a well-known monthly journal on tax planning and tax saving. He answered questions related to Union Budget 2008-09 on IBNLive.com on Friday. Here is the full transcript of the chat.

Preeti: Do you think that this Budget has been pro-growth in India or is largely motivated by political profit?

Subhash Lakhotia: Overall I feel it will benefit the tax payers but surely political profit cannot be denied. More particularly when we see the waiver of loans by farmers.

Yagnadatt N: How the relief given to farmers will be adjusted from the income of the government?

Subhash Lakhotia: The government has yet to announce the manner in which it will adjust.

Vikram Singh: Sir, farmers have received a Rs 60,000 crore package, but where do you think these finances will come from ? Will the middle class suffer again?

Subhash Lakhotia: I don't think that consequent to the relief given to the farmers, the middle class has to suffer. Only the deficit of the government would go up. This is what I feel. Government cannot aim at giving benefit to the farmers at the cost of middle class persons.

Aditya: Hi Subhash. Can you please tell what are the detailed implications of this Budget for a salaried person? Is the personal investment cap of Rs 1 lakh same or altered?

Subhash Lakhotia: The salaried class like any other individual tax payer will benefit a lot specially because of the increase in the basic income tax exemption. The limit of Rs 1 lakh remains unchanged.

Jai Kishen: As FM has not extended STPI scheme, as per your view what will happen to IT companies who are already suffering because of US recession, rupee appreciation?

Subhash Lakhotia: They will be governed by the provisions as they appear in the IT Act. They will enjoy no special benefit.

Jaimin Deliwala: An assessee incurs loss under derivative transactions fulfilling the criteria of section 43(5)(d) of Rs 2,00,000. His business profit is Rs 5,00,000. Can he set off the derivative loss against the business profit as section 43(5)(d) do not deem the derivative transaction as speculative transaction? Kindly advice.

Subhash Lakhotia: Happy news for you. Yes you can adjust the derivative loss with business income.

Prasad: Sir, my present income is Rs 10 lakh per annum. By availing all the benefits under Sec 80 and with the new tax slabs what would be my savings on IT?

Subhash Lakhotia: You would save nearly Rs 45,320 income tax as a result on new Budget proposals.