BUDGET 2017-18: Things To Know
The Budget for Financial Year 2017-18 was presented earlier this week by our Hon’able Finance Minister in the parliament. This was the first budget post demonetization drive with a lot of expectation from the various sections of the society. The Government had to balance the budget keeping in mind the interest of the common people as well the need to address issues of reforms and economy growth.
Many were quite skeptical about the Budget post the demonetization. The budget did announce few benefits for the Common Class but it was more directed towards the cleaning up of the parallel economy run through black money and move towards more compliant India. Some of the facts which came out during the budget were really surprising.
In a nutshell I would like to highlight some of the key announcements in the Budget 2017.
Demonetization to have a positive impact in the Long run.
Reforms in Foreign Direct Investment (FDI) with 90% of the inflows being automated.
Foreign Investment Promotion Board (FIPB) to be abolished in order to liberalize the FDI policy.
Payment Regulatory Board to be setup under RBI which would replace the existing Board for Regulation and Supervision of Payments and Settlement Systems.
Negotiable Instruments Act to be revised.
Corporate Tax for Small Companies with Annual turnover of upto Rs 50 crore to be levied at 25%.
Policy to setup Crude Reserves.
MAT Credit allowed to be carried forward up to period of 15 years instead of 10 years.
Customs Duty on LNG cut by 2.5%.
Service Charges waived on e-tickets booked through IRCTC.
Donation to Political parties in cash restricted to Rs 2,000.
Head Post Office to also render passport services.
Electoral Bonds to be issued by RBI for Political Funding.
Only 2.24% of the population paid Income Tax in 2015-16.
Figures quoted stated that 76 lac Tax Payers earn over Rs 5 lac a year, with Salaried assesses making up 73% of the group.
Only 5.97 lac out of 13.14 lac registered companies have filed returns for 2016-17.
Promotion to Digital Economy. Cashless transaction to be promoted through various channels. Aadhar based payment system to be launched soon.
Tax rate slab revised to 5% from existing 10% for the income tax payers for income assessed between Rs 2.5 lacs to Rs 5lacs.
Rebate U/S 87A reduced to Rs 2,500/- and would be extended only to Individuals with income upto Rs 3,50,000/-.
Simplified one page return for Individuals with an annual income of Rs. 5 lakh other than business income.
Cash Transaction restricted to maximum of Rs 3,00,000.
Surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between Rs 50 lakhs and Rs 1 crore, which will go upto 15% for income above 1 crore.
Relaxation on NPS withdrawal norms, now 25% of subscriber’s own contribution will be eligible for withdrawal provided the account has completed atleast 10 years. Self Employed Individuals can now claim deduction upto 20% on account of contribution to National Pension Fund.
Amendments to Capital Gain Clause, Holding period for immovable property reduced to 2 years from 3 years. Base year indexation for Capital Gain Tax calculation changed from 1st April, 1981 to 1st April, 2001.
Maximum Amount of Loss from House Property which can be set off with Income under other Heads has been restricted to 2 lacs. However, unabsorbed loss to be carried forward as per the existing provisions.
Insurance Agents with income upto 2.5 lacs exempted from paying Tax Deducted at Source (TDS) provided they provide a self declaration regarding their income begin below the Taxable Limit.
HUMAN RESOURCE/LABOR LAWS
Simplification of Labour Laws.
Existing Labour Laws to be amalgamated into Four Codes namely, Wages, Industrial Relations, Social Security & Welfare and Safety & Working Conditions.
Under Maternity Benefit Scheme 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children
Formulation of action plan to eliminate diseases such as Kala-Azar and Filariasis, Leprosy, Measles and Tuberculosis.
I would say it was a satisfactory budget, although I expected bit more relief for the Individuals U/S 80C.
I will post about the new Income Tax Slabs for the Financial Year 2017-18 and other related issues in my upcoming posts.