Union Budget 2018 speech by finance minister Arun JaitleyKey Takeaways from Union Budget 2018

Key focus areas are:

Agri

Health for the Poor

Senior Citizens

Education

Sarkaar ki dakhal aam admi ke jewan main kam se kam hona chahiya

–1.5 times minimum, cost of production for all crops

–More APMCs to be connected to ENAM

–Rural Haats to be converted to Grameen Agri Markets (GRAMs) connected to ENAM and exempted from APMC regulations

–Export of agri commodities to be liberalised

–Kisan Credit Cards to animal husbandry and fishery farmers

–Bamboo grown outside forests taken out of the definition of ‘trees.’

–Special scheme to manage crop residue to deal with air pollution in Delhi

–8 crore rural women to get free gas under Ujwala Yojana

–4 crore rural households to get electricity – Pradhan Mantri Sawbhagya Yojana

allocation or Rs 16,000 crore

–Govt has built 6 crore toilets under Swachh Bharat Yojana, To build 2 crore more

–PMAY (Grameen) – 2017-18 51 lakh houses

–PMAY (Urban) – 36 lakh houses

–Govt to est dedicated affordable housing fund in National Housing Bank to be financed by dedicated bonds

________________

Comprehensive Social Security Program

–Revitalization of Education (RISE)

–It will add 24 new government-run medical colleges and upgrade all existing ones. To have a medical college in every state in the country.

–Rs 1 lakh crore over 4 years

–1000 Prime Minister’s Fellowships to be given to B Tech students for funding their PhD in IITs and IISc.

–National Health Policy – 1.5 lakh centres to provide free essential drugs and diagnostic services

–Indoor treatment in hospitals – Rashtriya Swasthya Bima Yojana – present coverage only Rs 30,000 – flagship National Health Protection Scheme to cover 10 crore poor and vulnerable families (50 crore beneficiaries) by providing up toRs 5 lakh per family per year for secondary and tertiary hospitalization.

–World’s largest government-funded healthcare programme.

–Rs 600 crore to be provided for nutritional support to TB patients of Rs 500 per month. 24 new government medical colleges and hospitals by upgrading existing facilities.

–Pradhan Mantri Jeevan Bima Yojana – Life Insurance Cover

–Pradhan Mantri Suraksha Bima Yojana- Personal Accident Cover

–Govt to further enhance programmes

–Sukanaya Samriddhi Accounts – more than 1.26 crore accounts opened until Nov 2017

–Govt 1.38 lakh – health and education expenditure as against Rs 1.22 lakh crore – estimated

–Mudra Yojana – about Rs 6 lakh crore in credit given – 70% of accounts of women

–Target of 3 lakh Mudra target for 2017-18

–EPF: Women’s contribution reduced to 8% from 12% under EPF for first three years of employment. Employer contribution will remain the same.

Infrastructure: Projects worth Rs 9.46 lakh crores have been facilitated and fast track

–Govt will contribute 12% of EPF in wages of new employment in all sectors.

–To complete constructing 9000 km of national highways by the end of FY19.

–NHAI to convert road assets into special purpose vehicles such as InVITEs to raise funds

–All railway stations with more than 25000 footfall to have escalators. To eliminate 4267 unmanned railway crossings.

–UDAAN – to connect 56 unserved airports in the country. Operations have started at 16 such airports.

–SEBI will consider mandating corporates to meet 1/4th of financing needs through bond market

–Distributed Ledger System – Blockchain

–Govt does not consider cryptocurrencies as legal tender and will consider taking all measures to eliminate their use in illicit activities

–Govt will consider introducing toll system on pay-as-you-use basis

–Govt to consider establishing a unified authority for regulating all financial services

–372 basis business actions – to be sent to states – to better ease of doing business

–Govt has approved listing of 14 CPSE and 2 insurance companies on stock exchange. Govt has approved strategic privatisation of Air India.

–Bharat 22, a success. Govt will continue with more ETF offers including a debt ETF.

–Disinvestment Target of 80,000 crore in 2018-19

–Equity of NHB to be transferred to Govt from RBI

–Govt to formulate comprehensive gold policy to develop gold as an asset class

–Regulated gold exchanges in the country

–Gold Monetisation Scheme to be revamped.

–Salaries of MPs to be indexed to inflation and revised every five years.

TAX PROPOSALS

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Fiscal Situation:

2017-18 GST revenue of 11 months instead of 12 months to be recevied

Shortfall of non tax revenues partly made up by higher direct tax rev and disinvestment

21.57 lakh crore versus 24.47 lakh crore

Fiscal Deficit 2013-14 was 4.4% of GDP

4.1 in 2014-15

3.9

3.5 in FY 16-17

3.5% in FY 17-18

Central Govt to bring down debt to 40% of GDP

Tax

12.6% growth in direct tax in current year

Average buoyancy in personal income tax – preceding 7 years – 1.1%

For FY 16-17 and 17-18

1.95% and 2.11% respectively

This amounts to 90,000 crore which can be attributed to strong anti-evasion

16-17

81.51 lakh new taxpayers filed returns

MSME corporate tax for 2018-19 has been cut to 25% up to revenue of Rs 250 cr

The number of effective taxpayers increased from 6.47 crore 8.27 crore by end of 16-17

Presumptive income scheme  2 crore

50 lakh – professionals

41% more returns

Agri co-op societies – tax-free income to members – include cos registered as farmer producer cos – 100 crore turnover – 5 years from 2018-19

Deduction of 30% given for new employees under 80JJ

Minimum period relaxed for footwear and leather

Real Estate

Real Estate – No adjustment to be made where circle does not exceed 5% of the consideration

MSMEs

250 crore turnover – corp tax rate reduced earlier to 25%

This reduced rate of 25% to be extended to cos with turnover up to 250 crore.

Govt will forgo 7000 crore revenue in FY 18-19

Salaried Tax Payers: No change

In 2016-17 , 1.89 crore salaried tax payers paid – 76000 rs per ind salaried

1.88 crore – individual business crore – avg 25,753 per ind business tax payer

Standard Deduction of 40,000 in lieu of transport and misc medical expenditure. Will also benefit.

Revenue cost will be about 8000 crore and 2.5 croe tax payers to benefit

Transport allowance to be continued for disabled taxpayers

Senior Citizens

Exemption of int income on dep with bank and post office

10 to 50k and no tds on such income. On all FDs and RDs

Health insurance premium and medical expenditure from 30k to 50k under 80D

In respect of certain critical illness in

60k

80

To 1 lakh under Sec 80DDB

Extra tax benefit of 4000 crore to senior citizens

PMVVY to be extended to March 2020 under which assured return of 8% given by LIC

Existing limit of 7.5 lakh increased to 15 lakh.

Stock exchanges in

Transfer of securities in IFCs capital gains tax exempt to NRIs

Currently income of trusts exempted if utilized for their objects

However no audit trial. Payments exceeding 10k in cash disallowed.

LTCG – Shares, MFs, currently exempted tax. Total amt of exempted

367000 crore as per AY 2017-18. Major part accrued by corporate and LLPs. Bias against manufacturing. RoI is already attractive even without tax exemption.

LTCG above 1 lakh to be taxed at 10%

All gains up to 31st Jan 2018 will be grandfather. If share pur 6 months before 31st is 100 and price on 31st jan at 120. No tax on this rupees 20. Any gain on excess of this 20 will be taxed at 10%

10% tax on dist income by equity MFs to bring parity between growth and dividend

At present 3% cess  – 2% primary and 1% secondary and higher

Cess increased to 4%

Will help govt collect 11,000 crore

E-assessment had been extended of 122 cities. To be rolled out across the country. IT Act to be amneded to notify e-assessment.

Indirect Tax:

First budget after GST rollout. Proposals on the customs side:

Customs Duty on mobile phones increased from 15 to 20%

Cess on imported goods replaced by social welfare surcharge of 10%. Exempted goods to remain exempted.

At present 3% cess  – 2% primary and 1% secondary and higher

Secondary and higher education Cess increased to 4%

Will help govt collect 11,000 crore

E-assessment had been extended to 122 cities. To be rolled out across the country. IT Act to be amended to notify e-assessment.

Indirect Tax:

First budget after GST rollout. Proposals on the customs side:

Customs Duty on mobile phones increased from 15 to 20%

Cess on imported goods replaced by social welfare surcharge of 10%. Exempted goods to remain exempted.

Author
Staff Writer

This article is written by RupeeIQ editorial staff.