Important Highlights and Announcements : Budget 2018 was presented by hon’ble finance minister Sh. Arun Jaitely in the parliament. The Fin Minister said that Government has taken care of every citizen of society to provide benefits to every part of society at large. Government called this budget as budget of poor and middle class. Government want to achieve the growth rate of 8% plus. The main objective of Government in budget is to accelerate growth of farmers, poor and other sections of society and to uplift the under developed regions , focus on strengthening agri and rural economy, provision of good health care to economically less privileged , taking care of senior citizens, infrastructure and working with states to provide more resources for improving the quality of education in the country. Here in this article you will read the important announcements of Budget 2018.
Sectoral announcements in budget 2018 – Important Highlights
AGRICULTURE AND RURAL ECONOMY
- Assured MSP for all the kharif and most of rabi crops at 1.5 times of production cost.
- Institutional credit for Agri sector 11 lacs crore.
- 2 new funds –FDIAF – fisheries and aqua culture infrastructure development fund and AHIDF – animal husbandry infrastructure development fund with corps of 10000 crores
- “Operation greens” scheme announced with budget of 500 crores to meet volatility of price changes in tomato , onions and potatoes.
- Announced to develops existing 22000 rural haats into GrAMs ,
- 2000 crores for Agri market infrastructure fund
- 200 crores for organized cultivation of highly specialized medicinal and aromatic plants.
- Allocated to food processing ministry 1400 crores .
- National bamboo mission 1290 crores to promote bamboo sector .
- “har khet ko pani “ under prime minister krishi sinchayi yojna 2600 crores.
- For loans to SHG of womens 75000 crores
- National rural livelihood mission 5750 crores
- Under Ujwala scheme target to provide free LPG connections to 8 crore poor women.
- Under saubahagya yojana 4 crore poor households with electricity connection with outlay of Rs. 16000 crore
- To fulfill “housing for all” dream project of govt. more than 1crore houses will be built by 2019 in rural areas.
EDUCATION, HEALTH AND SOCIAL PROTECTION
- Budgetary expenditure for 2018-19 is Rs. 1.38 Lac crore.
- Setting up of Ekalavya model residential school for best quality education to tribal children by 2022 in every block with more than 50% ST population And atleast 20000 tribal persons .
- RISE – revitalizing infrastructure and sytems in education by 2022 with outlay of 100000 crore .
- Allocation towards National Social Assistance Programme is 9975 crore.
- World’s Largest health care Scheme has been launched by Government to cover 10 crore poor and vulnerable families by providing upto 5 lac per family per year for secondary and tertiary care hospitalization.
- National Health Policy 2017 – 1200 crore .
MSME AND EOMPLOYMENT SECTOR
- To boost economic growth and employment 3794 crores allocated for giving credit support, capital and interest subsidy and for innovations.
- Proposed 3 Lac crores for lending under MUDRA for 2018-19.
EMPLOYMENT GENERATION :
- Government will contribute 12% of wages of new employees in EPF for all the sectors for next 3 years and will reduce contribution to 8% for first 3 years of their employment against existing 12% or 10% with no change in employers contribution.
- For textile sector allocation of 7148 crore.
INFRASTRUCTURE AND FINANCIAL SECTOR DEVELOPMENT :
- BUDGETARY allocation towards infrastructure is Rs. 5.97 lac crores for 2018-19
- Under Bharatmala Pariyojana about 35000 kms road construction in first phase with cost of 5.35lac crores has been approved.
- Easy monitoring and review of infrastructure projects by prime minister by introducing PRAGATI System.
- Allocation towards Railways capital expenditure is 1,48,528 crores.
- 12000 wagons , 5160 coaches , 700 locomotives are being procured in 2018-19 with renewal of 3600km of track .
- NABH Nirman – new inititave by Govt to expand airport capacity more than 5 times to handle a billion trips in a year
DIGITAL ECONOMY :
- The budgetary allocation for digital india programme is 3073 crore in 2018-19. The govt also proposes to set up 5 lac wifi hotspot in villages.
- Allocation of 10000 crores towards creation and augmentation of telecom infrastructure.
- Target of disinvestment 80000 crores for 2018-19.
- In his speech Fin. Minister said that three public insurance companies i.e. NIC , UIIC AND Oriental india insurance co. ltd. will be merged into a single insurance company.
FISCAL MANAGEMENT :
- Revised Estimates for expenditure inccured in 2017-18 are 21.57 lac crores.
- Finance minister projected fiscal deficit of 3.3% of GDP for 2018-19 however revised fiscal deficit figures were put at 5.95 lakh crore i.e 3.5% of GDP.)
- Growth in direct taxes for 2017-18 (UPTO 15th jan 18) is 18.7% against 12.6% in 2017-18.
- Huge increase in number of returns filled by 8.27 crores at the end of 2016-17 against 6.47 crores in 2014-15.
- M. proposed 100% deduction to companies registered as farmer producer companies with an T.O. upto 100 crores on profit derived for specified activites for 5 years from F/Y 2018-19
- in order to encourage NEW EMPLOYMENT deduction of 30% under 80 JJAA with further relaxation to 150 days in apparel industry , proposed to extend the same to footwear and leather industry.
- Also proposed to reduce the rate of 25% currently available to companies with turnover less than 50 crores (in 2015-16) and also to companies whose turnover upto 250 crore in 2016-17.
REVISION IN EMOLUMENTS
- PRESIDENT OF INDIA : 5LACS PER MONTH
- VICE PRESIDENT OF INDIA : 4 LAC PER MONTH
- GOVERNOR : 5 LAC PER MONTH
- EMOLUMENTS PAID TO MEMBERS OF PARLIAMENT WILL BE REFIXED WITH NECESSARY AMMENDMENTS IN LAW AND WILL BE LINKED TO INFLATION INDEX FOR AUTOMATICALLY REVISION OF EMOLUMENTS AFTER EVERY 5 YEARS.
- TO CELEBRATE THE 150TH ANNIVERSARY OF MAHATMA GANDHI , FATHER OF NATION ON 2ND OCT 2019 ALLOCATION OF FUNDS IS RS. 150 CRORE
BENEFITS FOR SALARIED AND NON SALARIED CLASS UNDER INCOME TAX IN BUDGET 2018.
To provide relief to salaried assesses allowed a standard deduction of Rs.40000 by removing the present exemption for TA (transport allowance) and Reimbursement of miscellaneous medical expenses.
Earlier deduction of TA was :19200 P.a. ( 1600/p.m. *12)
Reimbursement of hospitalization 15000/- p.a.
So your net benefit is now (40000-34200) = 5800 only.
However no changes in slab rate made by govt . earlier slab rates will remain continue for financial year 2018-19 also. But this was most expected from the govt. about increase in present slab rate.
RELIEFT TO SENIOR CITIZEN
- Exemption of interest income on deposits with banks and post offices to be increased from 10000 to 50000. No TDS will deducted for the same under section 194A it is applicable on all FD’s and RD’s
- Increase in deduction for health insurance premium under section 80D
- Increase in deduction for medical expenditure for critical illness from 60000(sen.citizens) and 80000 (super sen. Citizens) to 1,00,000/- for all senior citizens.
- Current investment limit has also been increased to 15 lakh from 7.5 lakh per senior citizen.
Increase in custom duty to 20% from 15% presently on some of parts and accessories to 15% and on certain parts of T.V’s to 15%
Custom duty is proposed to be reduced on raw cashew to 2.5% from 5% present.
Education cess and secondary and higher education cess on imported goods abolished. In place of above new social welfare surcharge will be levied at the rate of 10% of agreegate duties of customs on imported goods.however certain specified goods in (Annexure -6) will attract proposed surcharge at 3%
With implemention of GST , central board of excise and customs (CBEC) will be changed to Central Board Of Indirect Taxed and Customs (CIBIC)
Indian Companies having total SALES or gross receipts upto Rs 250 crores in Financial year 2016-17 shall be liable to pay tax at rate of 25%*
(Present upper limit 50 crores 2015-16 )
Mandatory filling of return by all companies and companies not mandating bthe same will be liable for prosecution .
All Assessments to be E assessed under section 143(3A).
Customs Duty on mobile phones and some accessories increased to 20%
Customs Duty on specified parts of televisions pegged at 15 %
Under section 143(1) No relaxation while processing the return on account of mismatch with 16a and 26as.
Deemed dividend will be under tax bracket in the hands of the company assesee as Dividend Distribution of tax at rate of 30%
Enhanced compensation, Interest on compensation ,subsidy, incentives and Claim or enhancement claim will be taxed in the year of receipt as per newly inserted Section 145B. Conversion of stock in trade to capital asset will be charged as business income in the year of conversion at Fair Market value on the date of conversion of stock.
Penalty for non-filing financial return under section 285BA has been increased to Rs 500/day*
Inventory valuation including Securities and Construction Contracts income will be computed on %age completion method as per ICDS rules.
To reduce MAT provisions to 9% in certain cases ( applicable for corporates)
Payments exceeding 10000 in cash ,made by trusts abd institutions will be disallowed
To implement long term capital gains exceeding 1lac at rate of 10% without any indexing benefits. However all gains upto 31 january 2018 will be grandfathered.
New tax on distributed income by equity oriented mutual funds at rate of 10%
Increased Cess on personal income tax and corporation tax . rate of cess now will be 4% from 3% (earlier)
Compiled by –
VIVEK K. SINGLA