Cabinet approves Union Budget 2018, which is delivered by Finance Minister Arun Jaitley in the Parliament. The Budget mainly focused in long term measures rather than short term measures for consistence growth of the country with balanced budget for next Financial Year.
Tax Proposals and highlights:
Highlights of previous Financial Year:
- Growth Rate of collection of Direct Taxes in Financial Year 2017-18 has been increased to 12.6%.
- Tax Base increases to 8.27 Crore in F.Y. 2016-17 which produces effective taxpayers to 8.27 Crore from 6.47 Crore in F.Y. 2014-15.
- Number of returns filed in previous financial year increases by 85.5 lakh new Returns.
- Excess Revenue Collected from Personal Income Tax amounts to Rs 90,000 Crore.
Proposals in Union Budget, 2018:
- 100% exemption benefit of Co-operative societies is also extended to Agriculture Producer Company having turnover up to 100 Crore for a period of 5 years starting from F.Y. 2018-19.
- Government foregoes revenue of Rs 7,000 Crore for proposed Financial Year 2018-19 by reduction of Corporate Tax to 25% to companies that reported turnover up to 250 Crore in Financial Year 2016-17.
- Real Estate Transactions:
Proposal to not make any additions when transactions are within 5% -/+ range from Circle rate for Real Estate Transactions
- No change in Income Tax Rate or Basic Exemption Limit for individualtaxpayers is announced. However, standard deduction of Rs 40,000 is proposed for salaried tax payers.
- 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 up to Rs. 15 lakh.
- Reduction of Minimum Alternate Tax (MAT) to 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%.
- Present cumulative Education and Higher Education Cess of 3% to be replaced with 4% Health and Education Cess for individual and corporate taxpayers.
- E Assessments through Income Tax Department was partially introduced previously in Select Cities, which would now be rolled out across the country.
Name of Central Board of Excise & Customs renamed to Central Board of Indirect Taxes. Further, Cross Border Trade is promoted through change in custom rates:
- 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%.