These are the major highlights of the Union Budget presented by Finance Minister, Shri Arun Jaitley in Parliament today, for the financial year 2017 – 2018.
1. FM. Mr. Aurn Jaitley raises to present the Union Budget at 11.08 a.m. after the condolence message over the death of Parliamentarian Mr. E Ahamed yesterday.
2. No sitting of the Parliament tomorrow as a mark of respect to the departed Soul.
3. Modi Govt. was elected amidst huge expectations from the people of the Country.
4. Will work to uplift vulnerable sections.
5. World economy faces a lot of uncertainties.
6. FM estimates world GPD to grow by 3.4% in 2017
7. CAD (current account deficit) declined to 0.3% of the GDP in H-1, FY2016-17
8. Mission to bring transparency in all business transactions.
9. Focus will be on energising youth and creating jobs.
10. CPI is down from 6% in July to 3% in December, 2016 and expected to remain within the RBI band.
11. Monetary policy stance of US Fed a concern for world economy. May lead to outflows from emerging markets.
12. Forex reserves cover a comfortable comfort for 12 months of imports.
13. Demonetisation was a bold and decision.
14. India has become 6th largest manufacturing country
15. Drop in economic activity during remonetisation is transient.
16. The pace of remonetisation has picked up and will reach comfortable levels by the end of this FY.
17. The effect of demonetisation is not likely to spill over to next FY.
18. Demonetisation seeks to make our economy cleaner and bigger.
19. Demonetisation will lead to higher tax revenue, with clear early evidence of bank lending rates coming down already.
20. Overall approach of the budget will be to spend more on rural upliftment, poverty alleviation and infrastructure.
21. The US Fed Reserve stance may lead to outflows from emerging markets.
22. Global crude prices have fiscal implications…
23. India is a bright spot in global economy.
24. Demonetisation seeks to eliminate corruption. Tax evasion has become a way of life in our country. Demonetisation helps transfer resources from the tax evaders to the government, which will use these for development schemes.
25. GST Bill will spur economic growth.
26. Fasal Bima Yojana coverage will be extended to 40%.
27. Target for Agri credit fixed at INR 10 lakh crores for this year.
28. Farmers will benefit from 60 day interest waiver earlier announced by the PM.
29. Agri expected to grow at record 4.1% during FY 17.
30. Will take step to ensure that farmers get better prices in the markets.
31. Will ensure sufficient credit flow to the underprivileged.
32. To up crop insurance coverage to 50% by FY19.
33. Proposal to integrate farmers with agro-processing units.
34. Modern law on contract farming to be prepared.
35. National agri-markets to be extended to 585 markets.
36. Long term Irrigation Fund set up in NABARD with corpus of INR 5000 Crores.
37. Dairy Processing Infra Fund to be set up with initial corpus of INR 2000 Crores and total corpus of INR 8000 Crores in next 3 years.
38. Issuance of soil health cards has gained momentum.
39. Will bring 1 crore households out of poverty by FY 19.
40. Allocation for MNREGA has gone up from 38500 Crores in FY16 to 48000 Crores in FY17.
41. Increased allocation of INR 23000 crores under PM Awas Yojana for the Housing sector.
42. Proposal to complete 1 lakh houses by FY19 for those living in Kaccha houses.
43. Innovation fund for secondary education to be created.
44. Mahila Shakti Kendra to be set up at village level with corpus of INR 500 Crores.
45. Affordable Housing to be given infra status.
46. 1.5 lakh health sub-centres to be transformed into health wellness centres.
47. Five special tourism zones will be set up which will be structured as special purpose vehicles.
48. There will be schemes for employment in textile, leather and footwear sectors.
49. Proposal to amend drug rules to ensure drugs available at reasonable rates.
50. 5 special tourism zones to be set up in partnership with states.
51. New rules regarding medical devices to be formulated which will reduce the cost of the devices and further investment in this sector.
52. Allocation to scheduled castes increased to INR 52393 crores.
53. 100 India International skill centers to be set up.
54. Aadhar based smart cards to be introduced for senior citizens.
55. National highway allocation at INR 64000 Crores.
56. AAI Act to be amended to enable monetisation of land.
57. 2000 kms of coastal roads have been identified for development.
58. A new Trade Infrastructure Export Policy to be announced.
59. Transport sector allocated INR 2.41 lakh crores.
60. Second phase of solar power development to be taken up for additional 20000 MW.
61. Government to set up new crude oil reserves.
62. Expert panel to integrate spot and derivative commodity market.
63. New FDI policy under consideration.
64. Proposals for electronics manufacturing of INR 1.26 lakh crores received in the last 2 years.
65. Optic fibre cable has been laid out in 155000 km under the Bharat Net scheme.
66. FIPB to be abolished, a new roadmap to be laid out soon in the next few months.
67. Listing of CPSE to be done, this will increase accountability.
68. A new trade infrastructure export scheme to be set up, INR 3.96 lakh Crores allocated for infrastructure.
69. INR 10000 crores allocated for recapitalisation of Public sector banks.
70. The lending target of banks to be doubled to INR 2.44 lakh crores.
71. Refinancing of housing loans to be done, this will give impetus to the real estate sector.
72. Shift to digital platform for payments, to help the common man.
73. Aadharpay to be announced shortly, a new platform for payment for people who do not have credit/debit cards and/or digital payment wallets.
74. Government to take steps to promote digital payments at petrol pumps and hospitals.
75. Proposal to create a payment regulatory board at RBI.
76. The use of ETFs for divestment will continue.
77. Government to set up new crude oil reserves.
78. The negotiable Instruments Act to be amended to protect payees of dishonoured cheques.
79. Considering new law to confiscate assets of economic offenders.
80. The number of tribunals to be rationalised.
81. Defence expenditure excluding pension at INR 2.74 lakh crores.
82. The total expenditure estimated at INR 21.47 lakh crores for the current budget.
83. Capital expenditure upped by 25.4% as compared to the last year.
84. Total resources to be transferred to states and UTs estimated at INR 4.11 lakh crores.
85. Peg fiscal deficit for FY 2017-18 at 3.2% of GDP.
86. Airport upgradation via PPP mode.
87. Substantial progress in ushering in GST regime.
1. Propose to invest INR 1.31 lakh crores in Railways in FY17.
2. Centre to fund INR 0.55 lakh crores out of the same.
3. Railways to implement end to end solutions for certain commodities.
4. Proposal to feed 7000 solar railway stations in medium term.
5. Railway throughput to be enhanced by 10%.
6. At least 25 stations redevelopment contract will be given in FY 17.
7. 3500 kms of railway tracks to be commissioned in FY 18.
8. New metro rail policy to be announced, to open up new job possibilities.
9. Service charge on e-tickets to be booked through IRCTC portal to be withdrawn.
10. IRTC, IRCON and IRFC to be listed on stock exchanges.
1. Tax to GDP ratio very low in India.
2. Companies and Individuals filing returns very low as compared to the Income.
3. 7.33 crores individuals who file tax returns, 99 lakh showed income below exemption limit.
4. Only 1.72 lakh individuals show income above INR lakhs annually.
5. Out of 1.72 lakh people who declare income above INR 5 lakhs annually, 56 lakh people are under the salary class.
6. This shows that we are a predominantly tax non-compliant society which burdens the people who pay tax honestly.
7. Post demonetisation deposits between INR 2 to 80 lakhs in 1.09 lakh accounts.
8. Post demonetisation deposits above INR 80 lakhs in 1.48 lakh accounts.
9. The holding period for holding immovable property under LTCG to be reduced from 3 years to 2 years.
10. The base index for LTCG to be shifted from 1.4.1981 to 1.4.2001 which will surely reduce the tax liability substantially.
11. The deduction for profit linked for start-ups changed from 3 years out of7 years instead of 3 out of 5 years now.
12. Not feasible to remove MAT. However, MAT will be allowed to be carried forward for a period of 15 years instead of 10 years now.
13. Reduction of 5% in tax rates for companies having turnover of less than INR 50 crores. The new corporate tax rates for such companies will be 25%.
14. This will make the MSME sector more competitive as compared to the larger sector.
15. For presumptive taxation, the presumptive net profit reduced from 8% to 6%.
16. The limit for cash expenditure for both revenue and capital expenditure reduced from INR 20000 to INR 10000.
17. The limit for cash donations reduced from INR 10000 to INR 2000.
18. No transaction in any form above INR 3 lakhs will be allowed in cash.
19. Basic customs duty on LNG cut from 5% to 2.5%.
20. The requirement of maintaining records of political donations received by political parties above INR 20000 had to be maintained. Now (a) the maximum amount of political donations that a political party can receive will be only INR 2000 from any one source; (b) Political parties will be entitled to receive donations by cheque or digital form; (c) an amendment is proposed in the RBI Act for issuance of electoral bonds where people can purchase these bonds from any nationalised bank and these can be redeemed only in the bank account of the political parties; (c) all political parties will have to file IT returns within the due date of filing returns; (d) If the above conditions are not met, political parties will lose benefit of income tax exemption on its income.
21. The threshold for maintaining books and accounts increased from turnover of INR 10 lakhs to INR 25 lakhs.
22. TDS of 5% for commission paid to insurance agents will be exempted if the agent’s total income is below the exemption limit subject to filing self-declaration.
23. Time limit for filing revised returns reduced to one year from the date of filing of the original returns.
24. Personal Income Tax slab reduced for individual assesses between 2.5 lakhs to 5 lakhs to 5% instead of present 10%.
25. Hence, the rebate u/s 87A reduced to INR 2500 for individuals and will be limited to individuals having income upto INR 3.5 lakhs.
26. Surcharge of 10% to be levied for individuals having taxable income above INR 50 lakhs to INR 1 crore.
27. Surcharge of 15% for individuals having taxable income above INR 1 crore will continue.
28. Tax foregone from this reduction in tax rate will be INR 15500 crores.
29. Now only a simple one page IT returns for individuals having taxable income below INR 5 lakhs other than business income.
30. No scrutiny for individuals filing IT returns for the first time unless the department has information of any high value transactions not declared in the returns.
31. Maximising effort to increase e-assessments and reduce physical assessments at IT offices.
32. Greater accountability on tax officers for errors of commission and omission.
33. Not proposing many changes in the indirect tax proposals considering the GST roll-out.
34. GST implementation will bring in more taxes to Centre and states.
CA. Sanjay Thampy
FCA, Grad. CWA, CS, DBM