While delivering the speech of Union Budget in the parliament session, Finance Minister Arun Jaitley made some key announcements on Tax. He delivered last full Budget amid subdued economic growth, challenging fiscal situation and farm distress. In this budget, Jaitley has managed to balance populist demands, the need to support economic growth and PM Modi’s focus on fiscal discipline and reforms
Have a glimpse of Tax
- The 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 GST to states against a projection of Rs 21.47 lakh crores
- In FY17, 85.51 lakh new taxpayers filed income tax returns
No Changes in Personal Income Tax Rates
- There were no changes in the income tax in budget
- Growth indirect taxes is 18.7 % until January.
- Surcharge of 10 pc income above Rs 50 lakh but less than Rs 1 cr to be continued next year; 15 pc income above Rs 1 cr to also continue.
- 100% tax deduction is allowed to co-operative societies
- 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
- Standard deduction of Rs 40,000 allowed for transport, medical reimbursement for salaried taxpayers
- 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
- Due to the standard deduction allowed to salaried employees, Rs 8,000 crore revenue is lost.
- Rs 7,000 cr revenue foregone on account of lower corporate tax for Rs 250 cr turnover cos
- Rs 19,000 cr revenue loss on direct tax in last fiscal
LTCG Will Be Taxed At 10%, Exceeding Rs 1 Lakh without Indexing
- STCT, Short-term capital tax will remain 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
- Within nine months of current fiscal, GST collections projection pegged at Rs 7.43 lakh crore in full-year 2018-19 as against Rs 4.44 lakh crore.
- PAN is made mandatory for any entity entering into a financial transaction of Rs 2.5 lakh or more.