Benefits and Drawbacks of Budget 2017 in Different Fields. In the previous article, we have given Top 80 Union Budget 2017 Highlights. Today we are providing the benefits and drawbacks of budget 2017 in different fields. Budget helps to aid the planning of actual operations by forcing managers to consider how the conditions might change and what steps should be taken now and by encouraging managers to consider problems before they arise. It also helps co-ordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments. Other essentials of budget include:
- To control resources
- To communicate plans to various responsibility center managers.
- To motivate managers to strive to achieve budget goals.
- To evaluate the performance of managers
- To provide visibility into the company’s performance
- For accountability
In summary, the purpose of budgeting tools:
- Tools provide a forecast of revenues and expenditures, that is, construct a model of how a business might perform financially if certain strategies, events and plans are carried out.
- Tools enable the actual financial operation of the business to be measured against the forecast.
- Lastly, tools establish the cost constraint for a project, program, or operation.
The budget is prepared by the Budget Division Department of Economic Affairs of the Ministry of Finance annually. This includes supplementary excess grants and when a proclamation by the President as to failure of Constitutional machinery is in operation in relation to a State or a Union Territory, preparation of the Budget of such State.
Budget 2017 : Benefits and Drawbacks
Benefits & Drawbacks of Budget to people in different fields:
For Tax Payers
- Tax rate for individual income in the lowest Rs 2.5 lakh-5 lakh bracket halved to 5 per cent. One-page tax form for those with taxable income up to Rs 5 lakh.
- No tax scrutiny for such first-time return filers.
- Deduction to self-employed on contributions to National Pension Scheme doubled from 10 per cent to 20 per cent, subject to a limit of Rs 1.5 lakh.
- Tax rebate cut from 5,000 to 2,500 for individuals with income up to Rs 3.5 lakh.
- Tax break due to interest paid on rented homes (whether first or second) will now be capped at Rs 2 lakh. This is likely to impact investment in real estate.
- 10 per cent surcharge on income of Rs 50 lakh-1 crore.
- Pay up to Rs 10,000 for late filing of tax return.
- Limit of cash donation to charitable trusts reduced from Rs 10,000 to 2,000/-
- Base for computing indexation benefit for long-term capital gains shifted from April 1, 1981 to April 1, 2001. Holding period for computing long-term capital gains on land and building reduced from three years to two years.
- Reinvestment of capital gains in notified redeemable bonds beyond NHAI, REC to qualify for long-term CG tax exemption.
- Partial withdrawal from NPS tax-exempt up to 25 percent of employee’s contributions.
- No exemption from long-term capital gains on transfer of listed shares if securities transaction tax not paid on purchase of then unlisted shares bought after Oct 1, 2004.
- Professionals, salaried employees and smaller businessmen paying more than 50,000 a month as rent will have to deduct tax at source at 5 per cent.
- Train travel set to get cheaper with withdrawal of service charge on tickets bought online through IRCTC.
- Non-residential MBA programmes at IIMs exempt from service tax, to get cheaper.
- Customs duty exemption revised on goods imported through postal parcels, packets and letters where CIF value less than 1,000.
- Excise duty on cigarettes up across the board; pan masala, bidis, gutkha and other tobacco products to also cost more.
- Silver coins, medallions to become more expensive due to higher customs duty.
- Reduced tax rate of 25 percent on firms with turnovers up to 50 Cr in FY 2015-16 Period for carry-forward and use of MAT credit increased from 10 to 15 years.
- Beneficial withholding tax rate of 5 percent on interest on ECBs of Indian firms extended by three yrs till June 2020. Also extended to their rupee-denominated bonds.
- Tax holiday to start-ups now available for 3 out of 7 years instead of existing 3 out of 5 years.
- No cash deals above Rs 3 lakh.
- No reduction in the corporate tax rate other than for small and medium firms.
- Money, immovable property or specified movable property worth over Rs 50,000 received as gift or for inadequate sum to be taxable.
Women and children welfare found ample presence in the Union Budget presented by Finance Minister Arun Jaitley today. The central government has increased the budget allocation for women and children welfare under various ministries from Rs 1.56 lakh crore to Rs 1.84 lakh crore.
Jaitley mentioned that Sabka Sath, Sabka Vikas begins with girl child and woman and for this, the government has allocated Rs 500 crore to set up Mahila Shakti Kendras at the village level in 14 lakh Anganwadi centers.
Pregnant women and lactating mothers have also got financial assistance in the budget. Under the Indira Gandhi Matritva Sahyog Yojana (IGMSY), the Centre’s maternity benefits program for pregnant and lactating mothers, the allocation has been increased from Rs 400 crore to Rs 21,000 crore in the new budget. In addition to this, the nationwide scheme for pregnant women was announced earlier by PM Narendra Modi on December 31, 2016, under which Rs 6000 will be directly transferred to the bank account of pregnant women.
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