Highlights of the Key Direct/ Indirect Tax Proposals of Budget 2018-19/ Finance Bill 2018
Highlights of the Key Direct/ Indirect Tax proposals made in the India’s Union Budget (2018-19)/ Finance Bill, 2018 presented in Parliament by the FM Sh. Arun Jaitley on 1 Feb. 2018, as per Press Release issued by the Ministry of Finance (GOI), are as under:
i) 100 percent deduction proposed to companies registered as Farmer Producer Companies with an annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.
ii) Deduction of 30 percent on emoluments paid to new employees Under Section 80-JJAA to be relaxed to 150 days for footwear and leather industry, to create more employment.
iii) No adjustment in respect of transactions in immovable property where Circle Rate value does not exceed 5 percent of consideration.
No Adjustment if Circle Rate Value varies within 5% of Consideration: Incentive for Real Estate Sector (Budget 2018)
iv) Proposal to extend reduced rate of 25 percent currently available for companies with turnover of less than 50 crore (in Financial Year 2015-16), to companies reporting turnover up to Rs. 250 crore in Financial Year 2016-17, to benefit micro, small and medium enterprises.
25% Corporate Tax Rate for MSMEs/ Companies having Turnover upto 250 crore (Budget 2018)
v) Standard Deduction of Rs. 40,000 in place of present exemption for transport allowance and reimbursement of miscellaneous medical expenses. 2.5 crore salaried employees and pensioners to benefit.
Standard Deduction of Rs. 40,000 for Salaried Individuals in Lieu of Exemptions (Budget 2018)
vi) Reliefs proposed for Senior Citizens
Enhanced Limits for Health Insurance/ Exempt Interest Income of Senior Citizens (Budget 2018)
vii) More concessions for International Financial Services Centre (IFSC), to promote trade in stock exchanges located in IFSC.
viii) To control cash economy, payments exceeding Rs. 10,000 in cash made by trusts and institutions to be disallowed and would be subject to tax.
Trusts/ Institutions not to make cash payments above Rs. 10,000 (Budget 2018)
ix) Tax on Long Term Capital Gains exceeding Rs. 1 lakh at the rate of 10 percent, without allowing any indexation benefit. However, all gains up to 31 January, 2018 will be grandfathered.
Rationalisation of Long Term Capital Gains Tax Rate at 10% (Budget 2018)
x) Proposal to introduce tax on distributed income by equity oriented mutual funds at the rate of 10 percent.
xi) Proposal to increase cess on personal income tax and corporation tax to 4 percent from present 3 percent.
xii) Proposal to roll out E-assessment across the country to almost eliminate person to person contact leading to greater efficiency and transparency in direct tax collection.
xiii) Proposed changes in customs duty to promote creation of more jobs in the country and also to incentivise domestic value addition and Make in India in sectors such as food processing, electronics, auto components, footwear and furniture.
Video of Budget Speech (2018) by FM Shri Arun Jaitley
Union Budget India 2018-19/ Finance Bill, 2018 (Download PDF Copy)