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The India Finance Minister Arun Jaitley presented the Union Budget 2018-19 in Parliament on 1st Feb 2018. This budget, Jaitley’s fifth, is the last full budget of this NDA government before India goes to polls for the General Elections in 2019.
Union Budget 2018 highlights
This is the first budget after big-ticket economic reforms like the Goods and Services Tax, dynamic fuel pricing, mega PSU bank recapitalisation and more. The Union Budget also includes the Rail Budget, the latter was presented separately till it was decided to present a joint annual budget in 2017.
Union Budget 2018 highlightsfor Railways
Total capital expenditure for Indian Railways set at Rs 1,48,528 crore. A special railway university will also be set up in Vadodara, Gujarat.
Union Budget 2018 Fiscal targets
Government aims for 2018-19’s fiscal deficit target of 3.3 per cent of GDP. Revised fiscal deficit for 2017-18 was Rs 5.95 lakh crore or 3.5 per cent of GDP.
Union Budget 2018 highlights Taxation
The government proposes no change in personal income tax rates for salaried class. Jaitley said in his speech that there has been a 12.6% growth in direct taxes in 2017-18; 18.7% growth in indirect taxes in 2017-18. As many as 85.51 lakh new taxpayers filed their tax returns in 2017-18, as against 66.26 lakhs in 2016-17. The number has increased from 6.47 crore in 2016-17 to 8.27 crore by end of 2017.
Jaitley proposed liberalisation of presumptive income schemes for small businesses with income below Rs 2 crore, similar schemes for professionals with income below Rs 50 lakh. Rs 90,000 crore additional income tax collection was seen in 2016-17 and 2017-18.
Corporate tax reduced has been reduced from 30 per cent to 25 per cent for companies with turnover up to Rs 250 crore, move to boost MSME sector. The finance minister has proposed revision in monthly emoluments of President of India at Rs 5 lakh,, Rs 4 lakh for vice president and Rs 3.5 lakh for governors.
Standard deduction of Rs 40,000 for salaried taxpayers was announced. In terms of capital gains tax, long-term capital gains are proposed to be taxed at 10 per cent on investments over Rs 1 lakh. Short term capital gains tax to remain unchanged at 15 per cent.
For senior citizens, Jaitley proposed exemption of interest income on bank deposits raised to Rs 50,000 for senior citizens as well as exemption of Rs 10,000 on income from Bank FDs and post offices. The budget proposes 10 per cent tax on distributed income by equity-oriented mutual funds as well as 100 per cent deductions for cooperative societies.
In the realty sector, Jaitley proposed that were to be made when circle is at or below 5 per cent of sale consideration.
In terms of revenue loss, Jaitley siad Rs 8,000 crore revenue was lost due to standard deductions for salaried employees. Also, Rs 7,000 crore forgone due to lower corporate tax on firms with turnover not exceeding Rs 250 crore. Rs 19,000 crore was lost last fiscal in terms of revenue from direct taxes.
Union Budget 2018 highlights for employees
Government pledges contribution of 12 per cent in wages of new employees in all sectors for the upcoming 3 years under EPF scheme. Women contribution to EPF slashed for initial three years to 8 per cent.
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