Union Budget 2018-19 Announcements In Nutshell

Today our Finance Minister Mr. Arun Jaitley presented the last Union Budget for the fiscal year 2018-19. This is also the last budget in five years before the upcoming national elections next year.

This budget has a negative impact on the economy and causes distress to farmers. There is a pressure on the Modi Government due to elections in eight states and lok sabha elections coming up next year. Let’s look into the highlights of this 2018 Union budget to understand how Mr. Jaitley balanced all these factors before releasing the Union Budget.

On Fiscal:

• In 2017-18 the fiscal deficit is 3.5 % of GDP which is 5.95 lakh crores. The anticipated fiscal deficit is 3.3% of GDP in the coming next year.
• A Net GST of 21.57 lakh crores was transferred to states as against to a projection of 21.47 lakh cores.

On Tax

• Income tax filing was done by 85.51 lakh new tax payers in Fiscal Year 2017
• This new budget did not propose any changes in the income tax payable for individuals
• Direct taxes recorded a growth of 18.7% (till Jan 15)
• Income above 50 lakhs and 1 crore has a surcharge is 10pc which is continued for next year also. Surcharge of 15pc on income above 1 crore will also continue next year.
• A 100% tax deduction is given to co-operative societies.
• Companies with a turnover up to 250 crores is in the financial year 2016-17 have to pay 25% of corporate tax.
• An exemption of income of 10,000 is given to senior citizens on bank fixed deposit and post-office savings.
• An exemption of 50,000 is given to senior citizens for medical insurance under section 80D.
• Investment in interest-bearing LIC schemes doubled from 7.5 lakhs to 15 lakhs.
• A standard deduction of 40,000 is allowed for salaried individual tax payers on transport and medical reimbursement.
• Government faced a loss of 8000 crores due to standard deduction allowance to salaried class.
• There is a loss of 7000 crores on the corporate taxes payable by companies with a turnover of 250 crores.
• There is a loss of 19000 on direct taxes in the last fiscal year.
• In reality deals the government has reduced hardships. If circle rate does not exceed 5 pc of sale consideration, there is no need to make any adjustment.
• Taxation of 10% will be levied without indexing on long term capital gains exceeding one lakh.
• There is no change in taxation on short term capital gains which remains at 15%
• An additional 11,000 crore can be collected with an increase on educational cess from 4% to 3%.
• There will be an effect on balance sheets as GS revenue will be received only for 11 months.
• PAN card entry is made mandatory by government for any financial transaction made above 2.5 lakhs.
• Last year the GST revenue was 4.44 lakh crore in nine months of current fiscal year. This year it is projected at Rs 7.43 lakh crore in full year 2018-19.