Key Highlights from Budget 2018: 10% LTCG tax introduced, Fiscal deficit at 3.5% for FY18
Finance Minister Arun Jaitley's delivered this government's fifth and last full Budget amid subdued economic growth, challenging fiscal situation and farm distress. What makes it all the more important is the upcoming elections in eight states this year and the General Election next year, all of which put tough demands on it. How has Jaitley managed to balance populist demands, the need to support economic growth and PM Modi's focus on fiscal discipline and reforms? Read the highlights from Budget 2018 below to find out:
Finance Minister Arun Jaitley's delivered this government's fifth and last full Budget amid subdued economic growth, challenging fiscal situation and farm distress. What makes it all the more important is the upcoming elections in eight states this year and the General Election next year, all of which put tough demands on it. How has Jaitley managed to balance populist demands, the need to support economic growth and PM Modi's focus on fiscal discipline and reforms? Read the highlights from Budget 2018 below to find out:
Fiscal Situation
* Fiscal deficit is 3.5% of GDP at Rs 5.95 lakh crore in 2017-18. Projecting fiscal deficit to be 3.3% of GDP in the next fiscal
* Rs 21.57 lakh crores transferred as net GSTto states against a projection of Rs 21.47 lakh crores
* 85.51 lakh new tax payers filed income tax returns in FY17
* NO PERSONAL INCOME TAX CHANGES PROPOSED IN BUDGET
* Growth in direct taxes (till Jan 15) is 18.7 %
* Surcharge of 10 pc on income above Rs 50 lakh but less than Rs 1 cr to be continued next year; 15 pc on income above Rs 1 cr to also continue.
* 100% tax deduction is allowed to co-operative societies
* Corporate Tax of 25% extended to companies with turnover up to Rs 250 cr in financial year 2016-17
* Incentives for Senior citizens: Exemptions in income of Rs 10,000 from Banks FD and post offices
* Senior citizens to get Rs 50,000 per annum exemption for medical insurance under Sec 80D
* Rs 7.5 lakh per senior citizen limit for investment in interest-bearing LIC schemes doubled to Rs 15 lakh
* Standard deduction of Rs 40,000 allowed for transport, medical reimbursement for salaried tax payers
* Govt to reduce hardships faced in realty deals; no adjustment to be made in case circle rate does not exceed 5 pc of sale consideration
* Rs 8,000 crore revenue lost due to standard deduction allowed to salaried employees
* Rs 7,000 cr revenue forgone on account of lower corporate tax for Rs 250 cr turnover cos
* Rs 19,000 cr revenue loss on direct tax in last fiscal
* LONG TERM CAPITAL GAINS EXCEEDING RS 1 L AKH WILL BE TAXED AT 10% WITHOUT INDEXING
* Short term capital tax remains at 15%
* A tax on distributed income at 10%
* Education cess increased to 4% from 3% to collect additional Rs 11,000 cr
* GST revenue will be received only for 11 months, that will have an effect on balance sheets
* GST collections projection pegged at Rs 7.43 lakh crore in full year 2018-19 as against Rs 4.44 lakh crore in nine months of current fiscal.
* Govt makes PAN mandatory for any entity entering into a financial transaction of Rs 2.5 lakh or more.
Customs Duties
* Customs Duty on certain products, such as mobile phones and televisions has been increased, to provide a fillip to 'Make in India'
* Social welfare surcharge of 10% on imported goods.
* Central Board of Excise and Customs renamed as Central Board of Indirect Taxes and Customs
* Import of solar tempered glass for manufacture of solar cells exempted from customs duty.
* Customs duty on crude edible vegetable oils like groundnut oil, safflower seed oil hiked from 12.5% to 30%; on refined edible vegetable oil from 20% to 35%
* Customs duty on sunglasses, cigarette lighter, toys, bus and truck tyres, select furniture hiked.
* Customs duty on imitation jewellery hiked from 15% to 20%; doubled on all watches to 20%.
* Import duty on LCD/LED/OLED panels, parts of TVs hiked to 15%; duty on smart watches, wearable devices, footwear doubled to 20%.
* New scheme for providing electronic assessment to eliminate person-to-person contact
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