Union Budget Top 10 Critical Points – (2017- 2018). In the previous article Union Budget 2017 : Tax Rate Reduced to 5% on income 2.5 to 5 Lakh and Benefits and Drawbacks of Budget 2017 in Different Fields. Today we are providing Union Budget Top 10 Critical Points and Highlights (2017- 2018). Finance Minister Arun Jaitley presents the Union Budget 2017 on Wednesday, February 1 at 11 AM. The union budget 2017 is considered to be the most historic and unique budget in the history of Independent India, considering that fact that it would be presented on February 1, doing way with the former date of presentation on the last working day of the month. The budget also holds significance due to its close proximity to the announcement of the demonetisation drive by Prime Minister Narendra Modi on November 8, 2016.
Top 10 Critical Points of the Union Budget 2017-18
Here, are the top 10 critical points of the Union Budget 2017-18, you must know:
Personal Income Tax
- The rate of taxation for Individual assesses between an income of 2.5 lakhs to 5 lakhs reduced to 5% from the present rate of 10%.
- Surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between 50 lakhs to 1 crore.
- Simple One-Page Income Tax Return (ITR) for the category of individuals having taxable income up to 5 lakhs other than business income and no scrutiny for the first timers.
- Threshold limit for Audit of business entities who opt for presumptive income scheme increased from 1 crore to 2 crores.
- Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs
- Commission payable to individual insurance agents exempt from the requirement of TDS subject to their filing a self-declaration that their income is below taxable limit
- Under scheme for presumptive taxation for professionals with receipt up to 50 lakhs p.a. advance tax can be paid in one instalment instead of four.
Revising Tax Return
- Time period for revising a tax return is being reduced to 12 months from completion of the financial year, at par with the time period for filing of return.
- Also the time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter.
- No Cash transactions above 3 lakh would be permitted subject to certain exceptions
- Presumptive Income under Section 44AD for small and medium tax payers whose turnover is up to 2 crores, the present, 8% of their turnover is reduced to 6% in respect of turnover which is by non-cash means
- Maximum amount of cash donation, a political party can receive, will be Rs. 2000/- from one person.
- Political parties will be entitled to receive donations by cheque or digital mode from their donors.
- Amendment to the Reserve Bank of India Act to enable the issuance of electoral bonds in accordance with a scheme that the Government of India would frame in this regard.
- Every political party would have to file its return within the time prescribed in accordance with the provision of the Income-tax Act.
- Existing exemption to the political parties from payment of income-tax would be available only subject to the fulfilment of these conditions
Taxation for Companies/MSMEs
- MAT credit is allowed to be carried forward up to a period of 15 years instead of 10 years at present.
- For MSME companies more viable, income tax for companies with annual turnover up to 50 crores is reduced to 25%
Startup India Tax Benefits for Startups
- For the purpose of carry forward of losses in respect of start-ups, the condition of continuous holding of 51% of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues.
- Also, the profit (linked deduction) exemption available to the start-ups for 3 years out of 5 years is changed to 3 years out of 7 years
Housing / Real Estate Sector
- Under the scheme for profit-linked income tax deduction for the promotion of affordable housing, carpet area instead of the built up area of 30 and 60 Sq.mtr. Will be counted.
- For builders for whom constructed buildings are stock-in-trade, tax on notional rental income will only apply after one year of the end of the year in which completion certificate is received.
- Reduction in the holding period for computing long-term capital gains from transfer of immovable property from 3 years to 2 years.
- Base year for indexation is proposed to be shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable property.
- The target for agricultural credit in 2017-18 has been fixed at a record level of `10 lakh crores.
- Farmers will also benefit from 60 days’ interest waiver announced on 31 Dec 2016
- To ensure the flow of credit to small farmers, Government to support NABARD for computerization and integration of all 63,000 functional Primary Agriculture Credit Societies with the Core Banking System of District Central Cooperative Banks.
Ease of Doing Business in India
- Foreign Portfolio Investor (FPI) Category I & II exempted from indirect transfer provision. Indirect transfer provision shall not apply in case of redemption of shares or interests outside India as a result of or arising out of redemption or sale of investment in India which is chargeable to tax in India
- Scope of domestic transfer pricing restricted to only if one of the entities involved in related party transaction enjoys specified profit-linked deduction.
Highlights of the Union Budget 2017:
- FM Jaitley concludes his Budget speech
- DnB Insta-Analysis on Budget 2017: Corporate tax reduction will support financial health of msmes segment
- Surcharge of 10% for those whose annual income is Rs 50 lakh to 1 crore: FM Jaitley
- Propose to reduce existing rate of taxation of those with income between 2.5 lakh to 5 lakh from 10% to 5%, says FM Jaitley
- EY India Insta-Analysis on Budget 2017: Corporate tax rate for small companies having turnover upto 50 cr. reduced to 25%. Will benefit 96% of companies in India
- Political parties will be entitled to receive donations by cheque or in the digital mode from their donors: FM Jaitley
- Maximum cash donation to political parties limited to Rs 2,000: FM Arun Jaitley
- SIT has suggested no cash transaction above Rs 3 lakhs. Government has accepted this, says FM Jaitley
- I propose to reduce basic customs duty on LNG from 5% to 2.5% in 2017-18, says FM Arun Jaitley
- Not to remove Minimum Alternative Tax in 2017-18; Propose to allow a carry forward of MAT for a period of 15 yrs as against 10 years now, says FM
- Income tax for small companies with an annual turn over of 50 crore, now to pay 25%, a 5% reduction, says FM
- Capital gains tax to be exempted, for persons holding land from which land was pooled for creation of state capital of Telangana, says FM
- The net tax revenue grew by 17% in 2015-16, says FM Arun Jaitley
- Plan to extend basket of financial instruments to which the capital gains can be invested sans payment of tax, says Jaitley
- Due to demonitisation advance tax on personal Income tax increased by 34.8%, says FM
- Out of 3.7 crore who filed tax returns in 2015-16, only 24 lakh persons showed income above Rs 10 lakh, says FM Jaitley
- We are largely a tax non compliant society, when too many people evade taxes burden falls on those who are honest, says FM Jaitley
- Of 76 lakh individuals who reported income of over Rs 5 lakh, 56 lakh are salaried, says FM
- More funds beyond Rs 10,000 cr for recapitalisation of banks will be provided if needed, says Jaitley
- The shares of railway CPSEs like IRCTC and IRFC to be listed on various stock exchanges, says Arun Jaitley
- New ETF with diverse stocks will be launched in 2017-18, says FM
- We are largely a tax non-compliant society, says FM Jaitley
- Urgent need to protect poor from chit fund schemes, draft bill placed in public domain, says FM
- Computer emergency response team to be set for cyber security of financial sector, says FM
- Government to further liberalise FDI policy, says FM
- Rs 2,74,114 cr allocated for defence expenditure, excluding pension; This includes Rs 86,000 cr for defence capital, says FM
- Second phase of solar power development to be taken up with an aim of generating 20,000 MW, says FM
- Trade Infrastructure Export Scheme to be launched in 2017-18; total allocation for infra at record Rs 3.96 lakh cr, says FM
- Digi Gaon will be launched to promote tele-medicine and education, says FM
- Crude oil strategic reserves to be set up in Odisha and Rajasthan apart from 3 already constructed, says FM
- Government provides Rs 2.41 lakh crore for transport sector, including railways, road and shipping, says FM
- Coverage of Fasal Bima Yojana to go up from 30 pc of cropped area to 40 pc in 2017-18 and 50 pc next year, says FM
- Select airports in tier-II cities to be taken up for operations, development on PPP mode, says FM
- Railway tariffs to be fixed on the basis of cost, social obligation and competition, says FM
- Fiscal Deficit target for 2017-18 is 3.2%, says FM Jaitley
- Have increased allocation for scientific ministry to Rs 37,435 cr in 2017-18, says FM
- Total resources being transferred to the states & union territories with legislature is Rs 4.11 lakh crore, says FM Arun Jaitley
- Total expenditure of budget 2017-18 has been placed at Rs 21.47 lakh crore, says FM
- Defence expenditure excluding pension at Rs 2.74 lakh crore, says FM Arun Jaitley
- The Aadhar enabled payment system to be launched soon;Banks have targeted to introduce additional 10 lakh Point-of-Sale terminals by Mar’17, says FM
- Government considering introduction of new law to confiscate assets of offenders who escape the country, says FM
- Chandigarh and eight districts of Haryana have been declared Kerosene free, says FM
- Unmanned railway level crossings to be done away with by 2020, says FM Jaitley
- Propose to double the lending target of Pradhan Mantri Mudra Yojana and set it up at Rs 2.44 lakh crore for 2017-18, says FM Arun Jaitley
- KPMG in India Insta-Analysis: FIPB may be phased out by 2017-18, New FDI policy under consideration
- Propose to double the lending target of Pradhan Matri Mudra Yojana and set it up at Rs 2.44 lakh crore for 2017-18: FM Arun Jaitley
- 3.5 Crore youth will be trained under Sankalp program launched by the government, says FM Jaitley
- Railway related state-run companies like IRCON and IRCTC to be listed on stock exchanges, says FM Jaitley
- During 2017-18, another 5 lakh ponds will be constructed, for drought-proofing, says FM Jaitley
- Action plan to eliminate Kala Azar & Filariasis by 2017, Leprosy by 2018, Measles by 2020 & Tuberculosis by 2025, says FM
- Allocation to electronics manufacturers schemes like MSIPS increased to all time high of Rs 745 crores with 250 proposals received, says FM
- The Foreign Investment Promotion Board has been abolished, says FM Jaitley
- Transport sector allocated Rs 2.41 Lakh crore and Bharat Net Project allocated Rs 10,000 crore, says FM Jaitley
- Service charges on e-tickets booked through IRCTC will be withdrawn, says FM Arun Jaitley
- Railways will integrate end to end transport solutions for selected commodities through partnership, says FM Jaitley
- By 2019, all coaches of Indian Railways will be fitted with Bio-toilets, says FM Arun Jaitley
- Atleast 25 stations expected to be awarded during 2017-18; 500stations to be made differently abled-friendly by providing lifts&escalators, says FM
- A new metro rail policy will be announced, this will open up new jobs for our youth, says FM Jaitley
- Rail safety fund with a corpus of Rs 100,000 crore to be created over a period of 5 years, says FM Jaitley
- Steps will be taken to launch dedicated trains for pilgrimage and tourism, says FM Jaitley
- Two new All India Institute of Medical Sciences(AIIMS) to be set up in Jharkhand and Gujarat, says FM Arun Jaitley
- Allocation to SC/ST increased by 35% to Rs 52,393 cr in FY18 : FM Jaitley
- National Housing Bank to refinance Rs 20,000 cr loans in FY18: FM Jaitley
- Allocation for women, children at Rs 1.84 Lk Cr in FY18: FM Jaitley
- 100 India International skill centers will be set up in India: FM Jaitley
- PM Housing Plan allocation raised to Rs 23,000 Cr in FY18: FM Jaitley
- To achieve 100% Village Electrification by May 2018: FM Jaitley
- 133-km road per day constructred under Pradhan Mantri Gram Sadak Yojana as against 73-km in 2011-14, says FM
- Government to set up dairy processing fund of Rs 8,000 crore over 3 years with initial corpus of Rs 2,000 crore, says FM
- National Testing agency to conduct all examinations in higher education, freeing CBSE and other agencies, says FM
- 27,000 cr to be spend on #PMGSY; 1 crore houses to be completed by 2017-18 for houseless, says FM.
- Bank lending rates for Housing Loans coming down in wake of Demonetisation: FM Jaitley
- 1.5 lakh health sub-centres to be transformed to Health Wellness Centres: FM Jaitley
- Propose to amend drug rules to ensure availability of drugs at reasonable prices: FM Jaitley
- Sanitation Coverage Under Swachh Bharat At 60% Now: FM Jaitley
- National Agriculture Market to be expanded to 585 Markets : FM Jaitley
- Undertaking mission to bring 1 Crore households out of Poverty: FM Jaitley
- Aim to make 50,000 Gram Panchayat poverty free: FM Jaitley
- To set up Dairy Processing Fund with Initial Corpus Of Rs 2000 Cr: FM Jaitley
- To raise crop insurance coverage to 50% In FY19: FM Jaitley
- Will support NABARD to digitise 63,000 primary Agri Co-Ops
- To raise farm Insurance Coverage area to 40% From 30%
- Target for Agriculture Credit fixed at Rs 10 Lakh Crore
- Long-term Irrigation Fund set up in NABARD, additional corpus of Rs 20,000 Crore: FM Arun Jaitley
- Demonetisation two tectonic policy initiatives, We have witnessed historic and impactful economic reform and policymaking, Number of global reports show India has considerably improved its policies, profile and practice, says FM
- Hope to resolve all issues regarding GST via consultations
- Expectations included burning issues like inflation and price rise, issue of corruption & crony capitalism
- Our government was elected amidst huge expectations of people, the underlying theme of expectations being good governance
- India’s macroeconomic stability continues to the foundation of our economic success. Signs of retreat from globalization have potential to affect exports from many emerging economies, including India: FM Arun Jaitley
- I am reminded of what our father of the nation Mahatma Gandhi said ‘a right cause never fails’, says FM. Demonetisation is a bold and decisive measure, for many decades tax evasion was a way of life for many, he adds.
- We will Continue To Uplift Vulnerable Sections of the Society. Inflation Has Been Controlled; Have Launched Massive War On Black Money: FM Arun Jaitley
- Arun Jaitley thanks the people for support to the Government, assures of more measures for people’s welfare.
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