Union Budget 2018: No change in personal Income Tax rates

New Delhi: Finance Minister Arun Jaitley presented the Union Budget 2018 in Parliament this morning. Continuing with the trend from last year, the Railway Budget was included in the General Budget, scrapping a century-old tradition of having a separate Budget for the Railways.

This is the last full-fledged Budget of the Government led by Prime Minister Narendra Modi before the country goes to polls in 2019. It is also the first since the Government-effected

major economic reforms including the Demonetisation and Goods and Services Tax (GST).

The Budget presentation has been advanced by a month to ensure that proposals take effect from April 1, the beginning of the new financial year.

There is a bit of disappointment for the common man and for consumer sentiment in general in the Budget as there will be no change in Income Tax rates. The reintroduction of standard deduction after many years of Rs.40,000 a year may not really enthuse tax payers.

There is some relief in medicals bills as the exemption on annual health insurance premiums has been increased from Rs.30,000 to Rs.50,000. This was necessitated given rising cost of healthcare, say experts.

Jaitley, in what he described as the first move towards the Universal Health Coverage, announced a health scheme for 10 crore families – 50 crore people with eligibility decided by the socio-economic caste census. That is also the Cabinet proposal that his government has not had time to consider for more than a year now.

The government does not consider crypto-currencies as legitimate but will explore the use of block-chain technologies. “Crypto-currency is being used to fund illegitimate transactions,” Jaitley said.

Jaitley also said the government will explore Artificial Intelligence (AI) and machine learning technologies. The budget has also allocated Rs. 10,000 crore for the telecom sector to help in the development of rural Wi-Fi.

PM HAILS BUDGET

Hailing the budget, Prime Minister Narendra Modi said, “I congratulate the Finance Minister for the decision regarding Minimum Support Price. I am sure it will help farmers tremendously. The Budget will bring new opportunities for rural India. This budget will accelerate economic growth and it is focused on all sectors.”  “This Budget is farmer-friendly, common citizen-friendly, business environment-friendly and development-friendly. It will add to ‘Ease of Living. The Budget will strengthen the hopes and expectations of 1.25 billion people of the country,” he added.

Highlights

• Full-fledged suburban rail project for Bengaluru.
• Rs.17,000 crore announced for both Bengaluru’s transport infrastructure with a special mention of the 160-km suburban rail.
• There will be a standard deduction of Rs.40,000 for transport and medical reimbursements for salaried employees.
• Exemption of interest income for deposits in banks and post offices will be increased from Rs.10,000 to Rs.50,000 for senior citizens.
• All senior citizens will now be able to claim benefit of a deduction of Rs.50,000 for any medical expenditure.
• For critical illnesses, the deduction is  increased to Rs.1,00,000.
• 100 percent deduction to farmer-producer companies having  Rs.100 crore turn-over.
• Corporate Tax will be reduced to 25 percent for companies who have a turnover up to Rs.250 crore.
• Customs duty on mobile phones to increase from 15 to 20%,  accessories increased to 15%, television at 15%.
• Education has increased to 4 percent from 3 percent.
• Customs duty on raw cashew will be reduced from 5% to 2.5 %.
• Karnataka to get an IIT.
• Emoluments will revised for the President to Rs.5 lakh, Rs.4 lakh for Vice-President and Rs. 3.5 lakh per month       for Governors.
• Proposal to refix emoluments to MPs with effect from April 1, 2018. The law will provide automatic revision of emoluments every five years indexed to inflation.
• Total revenue expenditure of the govt. is Rs. 21.57 lakh crore.
• Fiscal deficit 2013-14 was 4.4% of the GDP. In 2017-18, 3.5% of the GDP. Projected fiscal deficit 3.3 per cent of the GDP.
• 99 cities have been selected with outlay of Rs. 2.09 lakh crore under Smart City programme.
• Rural Haats to be upgraded to Grameena agricultural markets.
• Women Self Help Groups will be encouraged to take up organic farming.
• 2,000 crore fund for development of agricultural market.
• 2 crore additional toilets to be constructed under Swachh Bharat Abhiyan.
• Loans to women self-help groups increased 37% year-on-year
• Rs 1,200 crore proposed for free essential drugs
• Free power connections to 4 crore homes
• Govt. to provide free LPG connection to 8 crore women under Ujjwala scheme
• Railway capital expenditure for the year 2018-19 is Rs. 1.48 lakh crore. 18,000 km of doubling will eliminate capacity constraints.
• Increasing use of technology, fog-safe train protection and warning system are other focuses.
• 3,500 km railway lines to be commissioned in 2017-18 against 2,800 km in 2016-17.
• Redevelopment of 600 major railway stations taken up. All stations with more than 25,000 footfalls will have escalators.
• Govt. will launch a flagship national health protection scheme to cover 10 crore poor and vulnerable families.
• 50 crore beneficiaries will get Rs. 5 lakh per family per year. It will be the world’s largest State-funded healthcare programme.
• The government’s aim is that by 2022, every poor person should have a home. This year it is aiming at launching 51 lakh affordable homes.
• Bamboo is green gold. The government removes them from the definition of trees.
• Rs.200 crore for organic farming sector.
• During 2017-18, another 5 lakh ponds to be constructed for drought-proofing.
• AadharPay, a merchant version of Aadhaar-enabled payment system to be launched shortly for those without debit cards, mobile phones
• By 2019 all passenger coaches of railways to be fitted with bio-toilets.
• 24 new government medical colleges will be set up by upgrading existing district hospitals in the country. At least one medical college for three parliamentary constituencies.
• Govt to contribute 12% of EPF contribution for new employees in all sectors for three years, says Jaitley. He adds that contributions from women employees will be brought down from 12% to 8%.
• Highest ever allocation to MGNREGA at Rs 48,000 crore.
• Government allocates 7,148 crore for textile sector.
• APMCs will be linked with ENAM. The government will develop 22,000 Gramin agricultural markets.
• Minimum Support Price for agricultural projects has been increased by 1.5 times. Operation Green will be launched for agriculture and Rs. 500 crore has been allocated for this.
• UDAN shall connect 56 unserved airports and 31 unserved helipads in the country. AAI has 124 airports. The government proposes to expand airport capacity to handle more than one billion trips a year.
• Aadhaar has given every citizen a unique ID. Soon, individual enterprises to have Unique ID too.
• The govt will bring out a new industry-friendly policy to boost domestic defence production.
• Govt proposes to set up 5 lakh Wi-Fi hotspots; allocates Rs. 10,000 crore for this under telecom infrastructure. Cryptocurrency is not a legal tender.
• Proposal to develop 10 prominent tourist destinations as Iconic tourism destinations.