This year’s budget is more take and less give for the common man. The high hope of increasing income tax slab has gone into vain. The finance minister has re-introduced standard deduction, gave some benefits to senior citizens and women employees. Overall there is nothing much for a common man. Let’s have a look at the highlights of union budget 2018.
Salient Features of Finance Bill, 2018
- No change in Tax Rate. All persons including individuals, HUF, Firms and Companies to pay the same tax. However, Education cess is being increased from 3 to 4 % to be knon as Education and Health cess.
However for Domestic Companies having total turnover or gross receipts not exceeding Rs 250 crores in Financial year 2016-17 shall be liable tp pay tax at 25% as against present ceiling of Rs 50 crore in Financial year 2015-16.
Long term Capital gain exemption under section 10(38) in respect of listed STT paid shares being withdrawn.
However capital gain up to 31.1.2018 shall not be taxed as cost of acquisition will be taken as Fair Market Value as on 31.1.2018.
Tax on STT paid long term capital Gain will be 10% under Section 112A. Further such tax will be liable for TDS.
Standard Deduction of Rs 40,000 for salaried employees. However benefit of transport allowance of Rs 19,200 and Medical Reimbursement of Rs 15,000 under Section 17(2) are beinf withdrawn. Thus net benefit to salaries class only Rs 5,800
Provision of Section 43CA, 50C and 56(2)(x) being amended to allow 5% of sale consideration in variation vis a vis stamp duty value. On account of location, disadvantage etc.
Provision of section 40(ia) and 40A(3) and 40A(3A)are being made applicable to Charitable Trust . Hence expenditure incurred without deduction of tax and in cash will not be eligible as application of income under section 10(23C) and section 11(1)(a).
Agriculture Commodity Derivates income /loss also not to be considered as speculative under section 43(5).
Income Computation and Disclosure Standards(ICDS) being given statutory backing in view of decision of Delhi High Court decision.
Marked to market loss computed as per ICDS to be allowed under section 36.
Gain or loss in Foreign Exchange as per ICDS to be allowed under new section 43AA.
Construction Contract income to be computed on percentage completion method as per ICDS.
Valuation of Inventorty including Securities to be as per ICDS.
Interest on compensation, enhanced compensation. Claim or enhancement claim and subsidy, incentives to be taxed in the year of receipt only as per new Section 145B.
Conversion of stock in trade to the capital asset to be charged as business income in the year of conversion on Fair Market value on the date of conversion.
54EC benefit of investment in Bonds to be restricted to Capital gain on land and building only. A further period of holding being increased from 3 years to 5 years.
PAN to be obtained by all entities including HUF other than individuals in case aggregate of financial transaction in a year is Rs 2,50,000 or more. All directors, partners, members of such entities also to obtain PAN.
All companies irrespective of income to file a return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact whether it has a tax liability of Rs 3,000 or not.
Assessments to be E-assessment under new section 143(3A)
No adjustment under section 143(1) while processing on account of a mismatch with 26AS and 16A.
Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @ 30%.
The penalty for nonfiling financial return as required under section 285BA being increased to Rs 500 per day.
Farmer producer companies will get 100% exemption for 5 years
New employees cost deduction rationalized for 1st year of employment
Companies with turnover up to 250 Crore will have 25% tax rate
Rs 40000 standard deduction allowed to salaried employees
Interest on FDs limit raised to Rs 50000 for senior citizen
Senior Citizen Medical Insurance limit raised to Rs 50000
Critical illness expenditure limit also increased to Rs 1 lakh for senior citizen
Long-Term Capital Gain above Rs 1 lakh in a year on listed equity shares will be taxed at 10%. Such gains up to 31.01.18 exempted
Tax on Growth oriented Mutual Fund distributing Dividend
Total Cess on Income Tax is now 4%
Electronic Assessment introduced
Indirect Tax (Non-GST)
Customs duty on mobile phones and accessories increased
Educational Cess on some goods reduced
Certain changes in procedural part of Cus
Govt has implemented fundamental structural reforms
India stands out as the fastest growing economy in world
Promised to reduce poverty, build strong India
Direct transfer mechanism is a global success story
Will focus on health, infrastructure, senior citizens
Focus on ‘ease of living’ for common man
To move ahead on ease-of-doing-business
This Budget to consolidate gains of last 4 years’ budgets
Demonetisation has reduced cash in circulation
Recapitalised banks have better capacity to support growth
Indirect tax system made simpler with GST
FDI increased due to govt actions
Manufacturing sector back on growth path
There’s a premium on honesty because of govt’s reforms
Firmly on course to achieve 8% plus growth
India to become fifth largest economy very soon
India a $2.5-trln economy now
Achieved average 7.5% growth in first 3 years of govt.
FY19 Budget aims to strengthen agri, rural economy
Seek paradigm shift to double farmers’ income by 2022
Govt committed to welfare of farmers
Govt to create mechanism for post-harvest facilities
MSP hikes not enough, farmers must be able to get benefits
Next kharif crop MSP to be at least 1.5 times of cost
Emphasis on generating gainful farm, non-farm jobs
Focus on low-cost farming, higher selling price
Institutional system for farm goods price, demand forecast
NITI Aayog to make robust system for fair price to farmers
Export of farm commodities to be liberalized
Agri export potential $100 bln
To launch Operation Green in line with Operation Flood
Allocate 5 bln rupees for Operation Green
Allocation for food processing sector 14 bln rupees FY19
Allocate 2 bln rupees for medicinal, aromatic crops
To encourage women self-help groups for organic farming
Cluster-based models to be developed for horticulture crops
e-NAM to be exempt from APMC regulations
To develop, upgrade 22,000 rural haats to agricultural mkts
To allocate 20 bln rupees for farm development fund
Favourable tax treatment for farm mfg organizations
Agri credit target at 11 trln rupees for FY19
Kisan credit card benefit also to animal husbandry, fishing
To launch bamboo mission for 12.9 bln rupees
470 APMCs connected to e-NAM, rest to be connected by Mar
To set up 42 mega food parks for farm exports
Hope to grow 7.2-7.5% in H2 FY18
Exports expected to grow 15% in FY18
100 bln rupees for animal husbandry, fisheries develop fund
To set up 2 new funds of total 100 bln rupees for fishery
Online loan facility for MSMEs to be revamped
To address bad loan problems of MSMEs
37.94 bln rupees for MSME credit support
Job creation core of policy planning
To take steps for improving start-up funding environment
PSUs to be part of e-trade receivables platform
To link e-trade receivables platform with GSTN
To review refinancing policies under MUDRA plan
To give 40 mln power connections under Saubhagya Yojana
3 trln rupees lending target for MUDRA plan FY19
Smart City scheme outlay 2.04 trln rupees.
To set up dedicated affordable housing fund under NHB
Aim 5.1 mln rural houses under affordable housing plan
Aim to give houses to all poor by 2022
Aim to build 20 mln more toilets under Swachh Bharat
More than 60 mln toilets built under Swachh Bharat plan
To give 80 mln LPG connections under Ujjwala scheme
To spend 1 trln rupees on education infra over 4 years
To subsidize removal of crop residue to tackle pollution
To set up Ekalavya schools for scheduled tribes
To treat education holistically pre-nursery to class 12
To move from Blackboard to digital board
Allocate 99.75 bln rupees for social security plan FY19
Allocation to Natl Livelihood Mission 57.50 bln rupees
Allocate 14.3 trln rupees for rural infra FY19
Allocate 26 bln rupees under groundwater irrigation plan
Health protection scheme to cover 100 mln, poor families
Allocate 12 bln rupees for health wellness centers
To launch PM research fellow plan for 1,000 BTech students
To set up 2 new schools of planning & architecture
600 mln Jan Dhan accts to get micro insurance benefit
24 new medical colleges to be set up via hospital upgrade
Aim 1 medical college for every 3 Parliament constituency
6-bln-rupee nutritional support for Tuberculosis patients
Govt progressing towards universal health coverage
Health scheme to have 500,000 rupees/family/yr benefit
Allocate 566.2 bln rupees for Scheduled Castes welfare
Cover all poor family in PM insurance plan in mission mode
187 projects sanctioned under Ganga cleaning programme
Allocate 391.35 bln rupees for welfare of Scheduled Tribes
Govt women employees to contribute 8% to EPF in first 3 yrs
Special scheme to fight pollution in Delhi-NCR
To develop 10 places as iconic tourism destinations
To construct tunnel under Sela Pass
- To allocate 71.5 bln rupees to textiles sector FY19