INDIA Budget - 2018_ Highlights

INDIA

BUDGET 2018 – Highlights

For Salaried Class:

1.              Standard deduction of Rs.40,000/- to replace Transport Allowance of Rs.1,600 p.m. and medical reimbursement of Rs.15,000 p.a.

 

For Businesses:

1.              Rate of Tax reduced to 25% for Domestic Companies having turnover upto Rs.250 crores (earlier upto 50 crores).

2.              Dividend distribution tax payable @ 30% on deemed dividend.

For Senior Citizens:

1.              Mediclaim deduction allowed upto Rs.50,000/-

2.              Interest income from Banks, Co-Operative Banks and Post Office exmpt upto Rs.50,000/-

3.              No TDS upto interest income of Rs.50,000/-.

For Women:

1.              Increased take-home pay for first 3 years of employment where employee contribution to PF will be restricted to 8%, with no change in employer contribution.

For NRIs:

1.              Capital Asset being Bonds or GDRs, Rupee Bonds of Indian Cos, Derivatives, exempt from tax if sold on recognized stock exchanges in International Financial Services Centre (IFSC), in foreign currency.

General:

1.              No change in the tax slabs.

2.              Education Cess of 2% and Secondary & Higher Education Cess of 1%, makes way to Health & Education Cess of 4%.

3.              STT paid Long term Capital Gains no more exempt under section 10.  To be taxed @ 10% in excess of Rs. 1 lakh.

4.              Sale consideration to be considered as adequate if Stamp Duty Value of property is within 105% of the same.

5.              Investment options to avoid capital gains tax available to gains out of Land & Building only.

Holding period of such investments raised from 3 years to 5 years.

6.              7.75% GOI Savings (Taxable) Bonds, 2018 replaces 8% Savings (Taxable) Bonds, 2003.

7.              Social Welfare Surcharge @ 10% of all taxes on goods imported in Schedule I to Customs Tariff.

8.              Road & Infrastructure Cess @ Rs.8 per litre on petrol and high speed diesel oil, in addition to customs and excise duty, will not impact prices as existing duties slashed.

 Some Missed Targets:

 

A         CORPORATE TAXATION:

The basic rate of Corporate Tax in India at 30% is higher than the rates prevalent in the other major Asian economies, making our domestic industry uncompetitive. … I, therefore, propose to reduce the rate of Corporate Tax from 30% to 25% over the next 4 years.  Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 28 Feb. 2015.

Towards fulfilment of my promise to reduce corporate tax rate in a phased manner, I now propose to extend the benefit of this reduced rate of 25% also to companies who have reported turnover up to `250 crore in the financial year 2016-17. This will benefit the entire class of micro, small and medium enterprises which accounts for almost 99% of companies filing their tax returns. Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 1 Feb. 2018.

B         GDP:

Based on the new series, estimated GDP growth for 2014-15 is 7.4%.  Growth in 2015-16 is expected to be between 8 to 8.5%. Aiming for a double-digit rate seems feasible very soon. Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 28 Feb. 2015.

IMF, in its latest Update, has forecast that India will grow at 7.4% next year. Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 1 Feb. 2018.

C          Fiscal Deficit:

I will complete the journey to a fiscal deficit of 3% in 3 years, rather than the two years envisaged previously.  Thus, for the next three years, my targets are: 3.9%, for 2015-16; 3.5% for 2016-17; and, 3.0% for 2017-18.  Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 28 Feb. 2015.

Revised Fiscal Deficit estimates for 2017-18 are `5.95 lakh crore at 3.5% of GDP.  I am projecting a Fiscal Deficit of 3.3% of GDP for the year 2018-19.  Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 1 Feb. 2018.

Promises Delivered:

A          INFLATION:

To ensure that our victory over inflation is institutionalized and hence continues, we have concluded a Monetary Policy Framework Agreement with the RBI, as I had promised in my Budget Speech for 2014-15.  This Framework clearly states the objective of keeping inflation below 6%. Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 28 Feb. 2015.

   

B             IMPLEMENTATION OF GST

Total Revised Estimates for expenditure in 2017-18 are `21.57 lakh crore (net of GST compensation transfers to the States) as against the Budget Estimates of `21.47 lakh crore.   Hon’ble Finance Minister Shri Arun Jaitley in his Budget Speech of 1 Feb. 2018.

ROAD AHEAD:

A             ‘Housing for all’ by 2022

B             Each house in the country should have basic facilities of 24-hour power supply, clean drinking water, a toilet, and be connected to a road.

C             Electrification, by 2020

 

  

JAI HIND