Thursday, February 1, 2018

Highlights of Union Budget 2018

Dear All, 

Please find below the highlights for this years Union Budget 2018



Here are the highlights of Finance Minster Mr.  Arun Jaitley's speech



 Imported electronics, including phones and TVs, will now get more expensive as government  proposes to increase custom duty on mobiles from 15% to 20%  and some parts of TVs to 15%.

 However Education cess is being increased from 3 to 4 % to be known as *Education and Health cess*.



 No change in Tax Rate. All persons including individuals, HUF, Firms and Companies to pay same tax.


 *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benefit of transport allowance  of Rs 19,200 and Medical Reimbursement  of Rs 15,000 under Section 17(2) are being withdrawn. Thus net benefit to salaries class only Rs 5,800


 Rs 50,000 benefit to senior citizens for investment in mediclaim Premium Under Section 80D.


 *Long term Capital gain exemption* under section 10(38) in respect of *listed STT paid shares* being withdrawn.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.


 *Penalty for non-filing financial return as required under section 285BA being increased to Rs 500 per day*.


 All companies irrespective of income to file return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact weather it has tax liability of Rs 3,000 or not.


 100% tax exemption for the first five years to companies registered as farmer producer companies  with a turnover of Rs. 100 crore and above.


 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).


 However  for Domestic Companies having total turnover or  gross receipts  not exceeding  Rs 250 crores in Financial year 2016-17 shall be liable to pay *tax at 25%* as against present ceiling of Rs 50 crore in Financial year 2015-16.

 41% more returns were filed this year, which shows that more people have joined the tax net.


 Tax payer base has risen from 6.47 crore in 2014-15 to 8.27 crore in 2016-17. More payers joining  tax net but turnover not encouraging.


 Assessments to be E assessment under new section 143(3A).



 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 Inventory including Securities  to be as per ICDS.


 Agriculture Commodity Derivates income /loss  also not to be considered as speculative under  section 43(5).


 No adjustment under section 143(1) while processing on account of mismatch with 26AS and 16A.


 Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @  30%.


 *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.


 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.


 *54EC benefit of investment in Bonds* to be restricted to Capital gain on land and building only. Further period of holding being increased from 3 years to 5 years.


 Conversion of stock in trade to capital asset to be charged as business income in the year of  conversion on Fair Market value on the date of conversion.






 Revised fiscal deficit estimate for 2017-18 is 3.5% of GDP, fiscal deficit of 3.3% expected for 2018-19.




 Government proposes to set up 5 lakh wifi-hotspots that will provide internet to five crore rural  citizens in 2018-19.


 Government provided Rs10,000 crore for creation and augmentation of telecom infrastructure in  2018-19.

 Government_doesn't_consider cryptocurrencies as legal tender or coins. Will take all measures to prevent use of crypto-assets to finance illegitimate activities.




 Rs 1,48,528 crore is the capital expenditure for the Indian Railways for 2018-19... All trains to be  progressively provided with WiFi, CCTV and other state-of-the-art amenities.


 All railways stations with more than 25,000 footfall to have escalators.


 12,000 wagons, 5160 coaches and 700 locomotives being procured. There is significant achievements of physical targets by Railways.


 Focus will be on safety, maintenance of railway tracks, increase in use of technology and fog safety  devices.


 Redevelopment of 600 major railway stations has been taken up; Mumbai transport system is being  expanded; suburban network of 160 km planned for Bengaluru.


 Foundation stone of the bullet train was laid in September 2017. An institute is coming up in  Vadodara to train the manpower required for the high speed railway projects.


 36,000-km of rail track renewal targeted in coming year.



 Agri-Market Development Fund with a corpus of Rs 2000 crore to be set up for developing  agricultural markets.


 Grameen Agricultural Market (GRAM) will provide farmers a means to sell directly to buyers.


 The focus is on low-cost farming, higher MSP. Emphasis is on generating farm and non-farm  employment for farmers.


 I am very happy to announce that minimum support price has been set at 1.5 times the production  cost for kharif crops: Jaitley


 The government will ensure payment of full MSP even if farmers sell below MSP.

 The Minimum Support Price of all crops shall be increased to at least 1.5 times that of the production cost.




 About 10 crore poor and vulnerable families will be targeted under healthcare protection scheme,  which will offer up to Rs 5 lakh per family. This will be the world largest government-aided programme.


 As per the national health policy 2017, health and wellness centres will be launched. Around 1.5 lakh  centres will provide free essential drugs, maternal and child services. The finance ministry allocated  Rs1200 crore for this flagship programme.


 TB patients will get Rs 500 per month for nutritional support.


 At least 24 new government medical colleges and hospitals will be set up by upgrading existing  district hospitals.


 Rs 1,200 crore for the flagship programme in health wellness centres.




 Contribution of 8.33% to EPF for new employees by the govt for three years and 12% govt

contribution to EPF in sectors employing large number of people.


 Government proposes to increase the target of providing free LPG connections to 8 crore to poor  women.





 4 new government medical colleges and hospitals to be set up by upgrading existing district hospitals.


 One medical college per every three Parliamentary constituencies.


 1,000 best BTech students to be made PM research fellows — to do PhDs in IITs and IISc. They will spend few hours every week teaching in technical institutions.


 Eighteen new schools of planning and architecure will be set up.




 Integrated B.Ed programme to be initiated for teachers, to improve quality of teachers.


 Technology will be the biggest driver in improving education.


 Budget 2018 will work with states to provide more resources to improve quality of education, says  Jaitley.




 Indian economy is on course to achieve high growth of 8%. Economy to grow at 7.2-7.5% in second half of 2018-19.

 India grew at an average of 7.5% in the first three years since 2014. It is now a $2.5 trillion economy.


 Indian economy has performed very well since our government took over in May 2014. It is now the seventh largest in the world, says finance minister Arun Jaitley.

 Government moves to remove stamp duty from financial transactions.



 To spend 14.34 trillion Indian rupees ($225.50 billion) on rural infrastructure.


 NHAI would transfer the road projects into special purpose vehicles to use innovative structures  such as infrastructure trusts for fund mobilization.



 By 2022, every block with more than 50% ST population and at least 20,000 tribal people will have 'Ekalavya'_school_at_par_with_Navodaya_Vidayalas_


 Allocation of Rs. 56,619 crore for SC welfare and Rs. 39,135 crore for ST welfare.




 Bharatmala project approved for better road connectivity at Rs 5.35 lakh crore.


 UDAN will connect 56 unserved airports in India.


 Airports Authority of India now has 124 airports, this will be expanded by 5 times. Aim of 1 billion   trips a year.



 Total 187 projects sanctioned under the Namami Gange programme.


 We aim that by 2022, all poor people have a house to live in.


 Government plans to construct 2 crore more toilets under Swachh Bharat Mission.


 Air Pollution in Delhi-NCR is a cause for concern, special scheme will be implemented to support  governments of Haryana, Punjab,Uttar Pradesh and Delhi-NCT to address it and subsidise machinery for management of crop residue.


 Proposal to develop 10 prominent tourist destinations as Iconic tourism destinations.


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


 Emoluments of the President to be revised to Rs 5 lakh per month & emoluments of the Vice- president to be revised to Rs 4 lakh per month.


 Government is proposing changes in refixing salaries of MPs. Law will provide automatic revision of  emoluments of the MPs every 5 years indexed to inflation.




 VCFs, angel investors to get new measures for growth and new tax rules to increase funding of  startups.

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