Like
every coin has a two faces – head & tale, this year Finance Budget
presented by Mr. Arun Jaitley (Finance minister) for Financial Year 2018-19 has
also some good take aways and some bad too for everyone, may it be Corporates,
Salaried, Farmers etc.
The
budget is aimed for faster growth of Indian Economy with equal importance given
to back bone of our economy i.e. farmers and rural infrastructure. Let’s try to
decode the Budget 2018 and see who gets what from Jaitley`s Budget Bag:
Corporates:
Reducing
the Corporate Tax Rate from 30% to 25% for small and mid size companies having
turnover of Up to Rs. 250 Crore is encouraging step taken by Finance Minister. He
has covered as good as 99% of Companies in India under this gift of reduction
in tax rates for Corporates, further recent changes made by ministry of
corporate affairs for filing and incorporation of companies has also been
welcomed. Further 100% deduction from Tax has been given to all the Producer
companies having turnover of upto Rs. 100 Crores. Further, Central Govt is
aimed to launch a scheme to assign a unique 16 Digit Code for all enterprise just
like as Aadhar is assigned to every individual.
Farmers & Rural Economy
“Jai
Jawan, Jai Kisaan”, this year’s
budget is aimed more on Jai Kisan. The Minimum Support Price for Kharif has
been increased to 1.5 times of produce price (Cost Price) which was never
considered by any FM in earlier budgets. Linking of MSP with the cost of
cultivation is unusual measure as the cost of cultivation of crops varies
across the country. Further a new measure in name of “Operation Green” shall be
initiated by Govt. to enhance the production of tomato, potato and Onions, a
sum of Rs. 500 Crore has been allocated for Operation Green in this budget.
22,000 Gramin Agriculture Markets shall also be developed; further 470 APMC
Markets shall be connected through a e-platform named “e-nam market”. The
budget has also increased the credit to agriculture sector to Rs 11 lac crore.
Key
take aways for Rural Economy in this budget are:
a)
Swach Bharat Mission – 2 Crore new
toilet to be completed by next fiscal year.
b)
Housing for All by 2022 – Govt to
constructed affordable houses in rural and urban areas. 1 Crore houses to be
built under Pradhan Mantri Aawas Yojna.
c)
New LPG Connections for approx 8
Crore Poor Women.
d)
Pradhan Mantri Saubhagya Yojna – 4
Crore Poor people to get Electricity.
Health & Education
One
of the key highlights of “Jaitley ki Potli” is expenditure on Health &
Education Sector. Govt to initiate a new Yojna “Aayushman Bharat Programme”
where Rs. 5 lac per year per family shall be given to 10 Crore poor families
for secondary and tertiary care hospitalisation. This shall be “World`s Largest Government Funded
Programme”. Further Rs. 500 per month to given to TB Patients from a
separate budget allocated of Rs. 600 Crore specially for TB. Further announcement
is made for setting up of One Medical College for every Three Parliamentary Constituencies
with 24 New Government Medical Colleges to be made in future.
Rs.
1 Lac Crore has been allocated for up-gradation of Education Sector. By 2022,
every block with more than 50% ST population will have “Ekalvya Schools” which
shall be at par with “Navodaya Vidyalayas” at present. Govt also plans to
replace old school “Black Boards” with New “Digital Boards” by 2022 under
Digital India Programme.
Senior Citizens
It
is proposed to exempt up to Rs. 50,000 from Interest earned on Bank & Post
Office FD`s. Deduction in Mediclaim under Section 80D increased to Rs. 50,000
from Rs. 30,000, further for critical illness deduction under section 80DDB
increased to Rs. 1,00,000 from Rs. 60,000 for Senior Citizens (Age 60 to 80)
and Rs. 80,000 for Super Senior Citizen (above 80 Yrs). Standard Deduction of
Rs. 40,000 is now allowed to pensioners for Transport & Medical
Reimbursement.
Salaried Class
“Mango
Men” OR Salary Class People have been totally disappointed from Jaitley. FM has
nothing special to offer this time for Common man. No changes have been made in
Income Tax Slabs. However minor increase has been made in Transport &
Medical Reimbursement by Rs. 5800. Govt plans to contribute 12% of wages of new
employees in all sectors for next 3 years, however for women employees’
contribution for first 3 years reduced to 8% from 12%. Biggest dis-appointment
for common man is introduction of LTCG (Long Term Capital Gain Tax) on income
from investment in Shares and all types Equity Oriented Schemes including
Mutual Funds. Jaitley has slapped flat 10% LTCG on all types of income from Shares
and Mutual Funds that too without Indexation benefit. Mutual Funds was last
resort for a common man for income generation and tax benefit both but Jaitley
has closed the last door available to middle class families. LTCG has been
slapped from 1st February 2018, with immediate effect. Further a
Cess of 4% in name of Health & Education has been levied. At present, 3% Cess, consisting of 2% Cess for primary
education and 1% Cess for secondary and higher education, is levied on personal
income tax and corporation tax.
Written by
Anuja
Sharma
FCA,
B.Com
(Anuja
Sharma & Co., Chartered Accountants, Mumbai)
A
Qualified Chartered Accountant in Practice, having experience of more than 12
Years in Taxation, FEMA, Banking Matters.
Sidharth
Sharma
FCS,
M.BA, M.Com, B.Com (Hons), DCA
(Sidharth
Sharma & Associates, Company Secretaries, Mumbai)
A
Qualified Company Secretary in Practice having experience of more than 12 Years
in Corporate Law, Tax and Banking Matters.
Disclaimer: Views, if
any, in this article are personal opinion of author(s).
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