Budget 2018 Highlight

The Union Budget 2018 was delivered today by our FM Arun Jaitley with the following Highlights:

Foreign direct investment has gone up, while the GDP at 6.3% is a signal of a turnaround of the economy. He added that exports are expected to grow at 15% in 2018-19.

MSP for Kharif crops to be 1.5 times the cost of produce

Setting up Agriculture Market Fund with a corpus of Rs 2,000 crore

The NDA government has promoted organic farmers in a big way, says Arun Jaitley. He added that women self-help groups will be encouraged to take up organic farming.

India’s agriculture export potential is $100 billion as against today’s $30 billion. He also added that food processing sector is growing at 8 percent. The allocation for food processing ministry being doubled to Rs 1400 crore, he said.

Aim to construct 2 crore toilets, says Jaitley.

Government allots Rs 9,975 crore for social security schemes

Jaitley said that Rs 16,000 crore will be spent on providing electricity connection to nearly four crore poor households.

“We have allocated Rs 1,200 crore allocated for health wellness centres. Rs 5 lakh per family per year for 10 crore poor families. The world’s largest government-funded programme,” says FM

3794 crores allocated to MSME’s for Research & Innovation looking at the contribution of MSME’s to employment and also in the form of capital support and interest subsidy

MSME’s are focus for growth, Banks will be pushed for Financing them, including stressed accounts & Introducing Electronic Bills Discounting

Introduction of GST and demonetisation has created a large database on MSME’s, says Jaitley. Govt will soon announce measures to tackle non-performing assets (NPAs)

PSU bank recap will allow banks to give additional lending of Rs 5 lakh crore

Divestment target Rs 80,000 crore for FY19

Govt will evolve a scheme to assign a Unique ID for companies

10 prominent tourist sites to be developed as iconic tourist spots. National Highways exceeding 9,000-km will be completed in 2018-19

Govt to allocate Rs 7,140 crore for textiles sector in 2018-19

Govt doesn’t consider crypto-currencies legitimate, Govt to back blockchain technology, eliminate crypto-currency

SEBI to mull asking large comapnies to meet 25% debt from bond market

UDAN scheme to connect 64 unconnected airports

The govt allocates Rs 3 lakh crore for Mudra loans. He says there were 10.38 crore Mudra loans given out in this fiscal, 70% of which went to women.

Contribution of 8.33% to EPF for new employees by the government for three years and 12% government contribution to EPF in sectors employing large number of people. Women employees’ contribution to EPF to be reduced to 8% from 10% for the first three years,

Propose to earmark Rs 56,000 crore for SCs and Rs 39,000 crore for STs

Out of 100 smart cities 99 cities have been selected with an outlay Rs 2.04 lakh crore

AMRUT programme to focus on water supply to all households in 500 cities. Water supply contracts for 494 projects worth 19,428 core awarded

“Focus will be on safety, maintenance of railway tracks, increase in use of technology and fog safety devices. to eliminate 4,267 unmanned rail crossings at broad gauge network

Redevelopment of 600 major railway stations has been taken up; Mumbai transport system is being expanded; suburban network of 160 km planned for Bengaluru. Will add 90 km Of tracks to Mumbal’s local train network At Rs 11,000 crore. Government to allocate Rs 17,000 crore for Bengaluru Metro Network

All railways stations with more than 25,000 footfall to have escalators. All railways stations and trains to have Wi-Fi and CCTVs progressively

One lakh Gram Panchayats connected to optic fibre completed; 5 lakh Wi-Fi spots to be created in rural areas: Niti Aayog to establish a national programme to direct efforts towards Artificial Intelligence, including research and development of its applications

Emoluments for President set at Rs 5 lakh, Rs 4 lakh for Vice President, Rs 3.5 lakh for governors

Tax Proposals:

Fiscal Deficit targeted at 3.5% as against originally targeted 3.2%

Growth rate of collection of Direct Taxes in FY 2017-18 has been 12.6%

Excess revenue collected from Personal Income Tax amounts to Rs. 90,000 crores (approx.)

Number of effective tax payers increased to 8.27 crores till end of FY 2016-17

Profit of Cooperative Societies were 100% exempt, which is extended to Farmer Producer Companies by this budget till their turnover is upto Rs. 100 crores, starting from FY 2018-19

Proposal to not make any additions when transactions are within 5% -/+ range from Circle rate for Real Estate Transactions

For Companies with a Turnover of upto Rs. 250 crores the Corporate Tax Rate reduced to 25%, estimated revenue foregone is about Rs. 7,000 crores . Effective date for this implementation to be read in the Budget Speech Text, since the live telecast was unclear about the specific year.

In Personal Income Tax for Salaried Tax Payers, a Standard Deduction of Rs. 40,000 to be provided in lieu of Transport & Medical expenses or reimbursements.

No change in rate of taxation or Basic exemption limit for individuals

For relief to Senior Citizens, incentives towards Exemption of Interest Income from Banks & Post Office deposits increased from Rs. 10,000 to Rs. 15,000 – with no TDS deductions.

Medical Insurance Premiums exemption increased to Rs. 50,000 from earlier Rs. 15,000. Additionally, an assured return of 8% to be given by LIC for investments upto Rs. 15 lacs.

Two Concessions given to IIFC (International Finance Tech Cities):

No Capital Gains on Derivatives for individuals transacting through exchanges in IIFC’s

Reduced MAT at 9.5%

Payments exceeding Rs. 10,000 in cash shall be disallowed and shall be taxable, and for non-deduction of TDS rate increased from 20% to 30%.

Long Term Capital Gains exceeding Rs. 1 lac to be taxed at 10% without any benefit of Indexation for Equity & Shares through Exchanges

Education Cess of 3% is levied currently on the Rate of Tax, the same is increased to 4% in the form of Health & Education Cess (Cess is levied on Income Tax Rates)

E Assessments through Income Tax Department was partially introduced previously in Select Cities, which would now be rolled out across the country

Indirect Taxes:

Import Duty increased to 20% (from 15%) on Import of Mobile Phones, further 5% increase on import of accessories

Import Duty on Cashews reduced to 2.5% from earlier 5%

Name of Central Board of Excise & Customs renamed to Central Board of Indirect Taxes

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