Highlights of Union Budget 2018

Today, 01 February 2018, the Finance Minister of India, Mr. Arun Jaitley presented the Union Budget for the fiscal year 2018-19 in the parliament. The budget seems to be primarily focused on Rural, Senior Citizens and Women. However there’s been a set back for investors in stock market as Long Term Capital Gain Tax has been introduced. Here we have categorised Key Takeaway points from the budget speech by him:

Taxation Part :

• 25% tax on companies with turnover upto 250 crores
• No changes in income tax to individual
• Standard deduction of ₹40000 in lieu of transport and medical
• Standard deduction for salaries of ₹40000

Incentive for senior citizen

• Interest from bank to be ₹50000 vs ₹10000 and no TDS.
• Deduction for health insurance from ₹30k to ₹50000 u/s 80d
• Medical deduction revised to ₹100000 u/s80ddb
• In case no TDS is deducted, 30% will be disallowed and tax

Long Term Capital Gain Tax

• LTCG on Listed Equity Shares
• LTCG exceeding ₹1,00,000 taxed at 10% without allowing benefit of indexation if the share is sold after January 31, 2018
• All gains up to 31st Jan 2018 are GRANDFATHERED

Salary:

• Standard deduction of Rs 40,000. To Pensioners and Salaried Employee
• Presumptive Income Scheme – Less than 2 Crores u/s 44ADA
• 41% more ITR’s filed this year
• 18 Lakh Returns for Presumptive – Average tax payments Rs 35,000/-
• 100% exemption to Profit of Co-operative Society engages members in agriculture
• 80JJAA – 30% deduction to emoluments to new employees (errata in Update 21)
• No change in Slab Rates

Real Estate:

• Provide no adjustment when circle rate does not exceed 5% of actual consideration

Fiscal Projection:

• Fiscal deficit might remain 3.3% of the total GDP in for the FY18-19.
• Government transferred ₹21.57 lac crores to States as net GST.

Focus on Rural India:

• ₹2000 crores allotted for agriculture funds
• Kharif crop to get at 1.5x times higher rates
• ₹1400 crores allotted to food processing sector
• ₹10000 crores for aquaculture, fisheries and animal husbandry funds
• ₹500 crores for Operation Green

Empowering Poor and Women

• Free LPG connection will be given to 8 crore poor women and power connection to 4 crore poor people. Total ₹16,000 crores will be spent on this.
• Building 2 crore toilets in the next FY and aim to provide houses for all by 2022.

Intelligent Nation:

• ₹1 lac crore been allotted to upgrade education sector in India
• Eklavya and Digital board schools by 2022

Healthy India:

• ₹5 lacs medical insurance for 10 crore families.
• At least 1 medical college in every parliamentary constituencies.

Oil Sector

• Excise duty on unbranded petrol and diesel is cut by ₹2. It will now be ₹4.48/ltr on petrol and 6.33/ltr on diesel

Employees Provident Fund:

• In all sectors, new employees to get 12% wages for next 3 years
• For first 3 years, EPF reduced to 8% for women

Roads and Highways:

• ₹5.35 lac crores to develop 35,000 km roads and highways. It is a part of Bharatmala project
• 99 cities out 100 are outlaid with ₹2.04 lac crores.

Railway Budget:

• Railways capex has been nailed down at ₹1.48 lac crores
• Elimination of 4267 unmanned rail crossings within 2 years
• Escalators for the stations with 25,000+ footsteps
• Bengaluru to get ₹17,000 crores for metro construction
• ₹11,000 crores for Mumbai railways