Budget Summary — A Quick Overview of the Important Tax Provisions in the Finance Bill 2018
| CA Abhishek Murali, M.Com, FCA, ACMA, CGMA, CIMA(Lon.), CISA, DISA |
Abhishek Murali gives us a snapshot based on Finance Minister, Arun Jaitley’s, Budget 2018.
The Finance Minister, Arun Jaitley, has presented the Budget for 2018, and people have been keeping a watchful eye on what it has in store for different segments of the economy — individual as well as corporate taxpayers.
Here is a summary. A detailed write-up from Mr Murali will follow. #
DIRECT TAXES #
The Statistics #
There has been significant growth in direct tax collections – 12.6% DT and 18.7% till Jan 2018
Average Tax Buoyancy till 2016 — 1.1%. Risen to between 1.95% and 2.11% in last 2 years due to anti-evasion measures
There has been an Increase in the number of tax returns filed with new tax payers numbering 85.51 lakh
Under the Presumptive Income Scheme, 41% more returns have been filed; 5.68 lakh returns have been filed by professionals.
TAX RATES #
No change in tax slabs and personal tax rates
Cess to be increased to 4% from the current 3%
Standard deduction for Salaried employees of Rs. 40,000/- as travel conveyance; this will include pensioners
- Reduced corporate tax rate of 25% for turnover upto Rs. 250 crores
Senior Citizens #
Exemption of interest income on deposit with banks and post offices to be increased to Rs.50,000 under 80TTA.
There will be no TDS on 194A.
All FD schemes under 80D – exemption raised to Rs. 50,000/- per annum
In respect of any health premium or general expenses under 80DDA the slab has been increased to Rs.1,00,000/-
CAPITAL GAINS #
Long Term Capital Gains #
LTCG on equity shares are currently exempt.
10% LTCG tax on investment in equity shares exceeding Rs. 1 lakh. This will be without indexation.
All gains up to 31st January 2018 will be grandfathered till the highest price as on 31st January, 2018.
Short Term Capital Gains #
STCG rate will continue at 15%
Dividend Distribution Taxes on equity-oriented mutual funds at 10%
IMMOVABLE PROPERTIES #
- 50C – To minimise hardships of different prices, no adjustment is required where circle rate value does not exceed 5% of valuation
COOPERATIVE SOCIETIES IN AGRICULTURAL ACTIVITIES #
100% tax deduction in cooperative societies engaged in agricultural activities
100% deduction now to farmer companies also where turnover is less than Rs. 100 crores.
EMPLOYMENT GENERATION #
Additional deduction #
30% additional deduction for new employees under Sec. 80JJAA.
Minimum period relaxed to 150 days in apparel, footwear and leather industries.
CASH TRANSACTIONS #
Payment exceeding Rs.10,000 by trusts by cash will be disallowed
TDS – 30% of the amount shall be disallowed on non-deduction
Reducing interface between Department and Tax-Payer*
Amend Income Tax Act where assessment will be done in electronic mode. Person to person contact to be eliminated*
The above are the highlights of Budget 2018 in a nutshell. The rest of the proposals and details can be found in Annexure 5.
Abhishek Murali, the first of our guest writers, who will feature on the Influx blog on matters of interest, is a practising chartered accountant based in Chennai. He is the Managing Director of Victor Grace & Co. and an elected Regional Council Member of the Institute of Chartered Accountants of India (ICAI).