There is a popular swimming garment of which it is said that what it reveals is important but what it hides is vital. The same seems to be true for the Budget speech. Too little is expressly disclosed and the real exposure comes through only in the fine print.
The following is a checklist of the major provisions of Budget 2007 that are of direct relevance to the common taxpayer.

Provisions relating to direct tax rates
The basic exemption limit in case of all taxpayers has been increased by Rs. 10,000. The new income limit below which tax is not payable is Rs. 1.1 lakh, Rs. 1.45 lakhs and Rs. 1.95 lakhs for non-senior men, ladies and senior citizens respectively. This would bring immediate relief from tax payable in the case of non-senior men and ladies to the extent of a flat Rs. 1,000. For senior citizens, the benefit would be higher at Rs. 2,000.
An additional cess named "Secondary and Higher Education Cess on Income Tax" of 1% is to be introduced. Effectively the cess component of the tax payable has gone up from 2% to 3%.
Clearly, this is a case of giving by one hand and taking by another. The net effect of both the above provisions is marginally beneficial for the income group below Rs. 5.50 lakh. Those who have an income above Rs. 5.5 lakh will actually end up paying higher taxes. In the case of senior citizens, the break even level of income is higher around Rs. 9 lakh.
Deduction in respect of medical insurance premium under section 80D has been increased to Rs.15,000 from Rs. 10,000 for non-senior taxpayers whereas for senior citizens, the limit has been enhanced from Rs. 15,000 to Rs. 20,000. Also, premium payments made by electronic mode, credit card etc. will also be allowed.
Currently personal effects except jewellery is excluded from the definition of capital assets. Now, archaeological collections, drawings, paintings, sculptures, or any work of art have been brought under the definition of the term capital asset and hence any transfer of such personal effects will attract capital gains tax.
Surcharge on income tax on all firms and companies with a taxable income of Rs.1 crore or less has been removed.
Limit of Rs.50 lakh per investor per year with respect to capital gains bonds issued by NHAI and REC under section 54EC continues.
Minimum Alternate Tax (MAT) has been made applicable to income in respect of which deduction is claimed under sections 10A and 10B. A backdoor entry to claim tax on an exemption promised earlier, this has clearly not gone down well with corporate India. Now all companies, will pay a minimum tax of 11.33% notwithstanding the exemptions that were promised earlier.
Deduction under Sec. 80CCD, in respect of contribution to a pension scheme notified by the Central Government was hitherto allowed only to a government employee.
This deduction has been extended to private sector employees too. Also, this amendment is applicable retrospectively from FY 03-04 onwards.
Deduction of interest payable on loan taken for higher education under Sec. 80E was available only to the individual taking the loan. It is proposed to amend section 80E so as to allow the deduction in case the loan is taken for the higher education of the individuals spouse and children also.
Interest on the immensely popular RBI 8% Savings Bonds was taxable but free from TDS. Effective 1.7.2007, any interest over Rs. 10,000 from such bonds would be subject to a TDS of 10%. Similarly, professional fees were subject to a TDS of 5% which has now been increased to 10%.
The TDS limit on interest from bank FDs and Post Office instruments has been increased from Rs. 5,000 to Rs. 10,000.
Stock options granted to employees have been brought under the purview of Fringe Benefit Tax. The valuation of such options will be decided as per a method prescribed by the Board. Simultaneously, the cost of acquisition of the shares for the employee concerned for the purpose of computation of capital gains would be the Fringe Benefit value as arrived at above.
Banking Cash Transaction Tax (BCTT) was leviable on cash withdrawals exceeding Rs. 25,000 from current accounts of individuals and HUFs. This limit has been increased to Rs. 50,000.

Provisions relating to Mutual Funds and the Capital Market
Dividend distribution tax on dividends paid by a domestic company has been increased from 12.5% to 15%. After surcharge and cess, the effective tax rate climbs to 16.995%
In the case of a money market mutual fund or a liquid fund, any dividend distributed to all categories of taxpayers would suffer a dividend distribution tax of 25% as against the earlier 12.5%. Again, the effective tax rate is actually 28.325%. Note that this is only in the case of money market funds and other non-equity funds like FMPs, Floating Rate funds, MIPs etc continue to be taxed at the earlier rate.
This has essentially been done to cut the arbitrage between the distribution tax and the income tax rate.
These amendments will take effect from 1st April, 2007
Securities Transaction Tax has been left unchanged.
PAN will be made the sole identification number for all participants in securities market with an alpha-numeric prefix or suffix to distinguish a particular kind of account. Which basically means that MIN will be essentially one's PAN with the specified prefix or suffix as will be decided.
Mutual Funds (MFs) are to be permitted to launch and operate dedicated infrastructure funds. Though currently MFs do have such funds, infrastructure is essentially the theme behind the portfolio construction. Though SEBI has to come out with specifics yet, one believes that these funds would be launched under a formal framework as 'infrastructure dedicated funds' where there could be a lock-in imposed to ensure long-term funds at the disposal of the scheme.
Individuals will be permitted to invest in overseas securities through Indian mutual funds. Again, certain MFs do offer this facility as the last year's budget had provided for the same but imposed an aggregate limit of $2 bln. So we will have to wait for further announcements in this regard to see what further facilities are being offered.

Provisions relating to Service Tax
The exemption limit for small service providers has been raised from Rs.400,000 to Rs.800,000. The basic rate of service tax has been kept constant, however, due to the additional cess, the effective rate has climbed from 12.24% to 12.36%.
Amongst others, renting of immovable property for use in commerce or business other than residential property and vacant land has been brought under the ambit of taxable service.
Similarly, asset management services including portfolio management and all forms of fund management service provided by any person except a banking company or a financial institution or any other body corporate or commercial concern has been brought under the ambit of taxable services.
It may be noted that the Budget does not contain any announcement whatsoever about the proposed EET system of taxation.