Key Points & Highlights of Indian Union Budget 2017-18 – presented on 1st Feb 2017
Personal Taxation
- Income tax for individuals for Rs 2.5 lakh to Rs 5 lakh lowered to 5%
- Individuals having income less than Rs 5 lakh will have to file a return with a one page form. Surcharge of 10% on those with income of Rs 50L to Rs 1 cr
- Reduction in timelines for revising return of income and completing scrutiny assessments.
Read full details on the impact on personal taxes in more details.
Fiscal Information
- India’s FDI increases 36 per cent despite global degrowth of 5%
- India has become the 6th largest manufacturing country in the world up from 9th position previously
- Foreign Exchange Reserve with India stands at 361 Billion Dollars
- Total expenditure for 2017-18 at Rs 21,47,000 crore. Capex up 25.4% over previous year
- Demonetization was bold decision to control black money, it will create clear and bigger GDP
- Demonetization disruptive, but will have long-term benefits. Pace of remonitisation has picked up; impact of DeMonetisation will not spill over to next year
- Forex reserves comfortably cover for 12 months of imports
- 3 challenges in current global scenario: Monetary stance of US FED Reserve, Commodity prices specially crude oil & retreat from globalisation
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Key schemes and Investments, Allocations
- The target for agricultural credit for the FY 2017-18 has been fixed at Rs 10 lakh crore. Agriculture is expected to grow at 4.1 per cent
- To spend Rs13,240 cr on crop insurance, modern law on contract farming will be prepared and circulated among states for adoption
- Issuance Of Soil Health Cards Has Gathered Momentum.To Up Crop Insurance Coverage To 50% In FY19
- Mission to bring 1cr households out of poverty
- A composite index of poverty for every Gram Panchayat to monitor progress to be developed
- A dedicated fund to be set up by NABARD with corpus of Rs. 5,000 crore to assure market prices to the farmers for their produce
- Dairy processing infrastructure fund will be set up under NABARD, with fund of 8,000 crore
- Focus in rural spending-mnrega fund targets achieved for last yr, 48000 crores- highest ever allocations. MGNREGA gets Rs 48K cr from rs 38.5K cr last year, highest till now
- 50,000 gram panchayats to be made poverty free by 2019
- Overall approach while preparing Budget2017 has been to spend more in rural areas, infrastructure and poverty alleviation
- Allocation for Pradhan Mantri Awaaz Yojana up from 15,000 cr to 23,000 cr
- 100 per cent electrification of villages by May 1, 2018
- Promises double income of farmers in 5 years and focus on poverty alleviation with fiscal prudence.
- INR 19,000 crores proposed for PMGKY Scheme so as to construct 1 crore houses for those living in kachha houses
- Safe drinking water key priority; panchayat raj institutions still lack basic facilities; progm to be launched for this purpose
- Allocation for rural housing increased from 15,000 cr to 23,000cr
- Participation of women in #MNREGA has increased to 55%
- Model law on contract farming to be adopted and circulated to states
- Swach Baharat Mission made tremendous progress, Open defecation will be reduced by providing water facility in rural areas
- Allocation to agiculture and allied activities highest at Rs 187223 crore, up 27% over last year
- Allocation for schemes for rural India pegged 24 percent higher at over RS 1 lakh, 87,000 cr
- Innovation Fund in high school announced; revised framework coming soon for outcome-based accreditation for colleges
- For providing Quality education for youth, an innovation fund will be created
- Pradhan Mantri Gram Sadak Yojana built 133 km roads as against 73 km earlier
- e-Market to be extended over 500 APMCs to help farmers
- Skill centres will be set up across the country to help youth seeking opportunities outside the country
- Govt to set up New Body to conduct all exams for higher education
- Govt to formulate modern law on contract farming and to be circulated among States
- A special scheme for leather and footwear sector to be introduced.
- Five special tourism zones anchored as Incredible India 2 to be promoted
- Govt wiil provide one stop convergence support system for skill employment etc for rual women
- Rs 6000 will be transferred to pregnant women’s accounts who go for institutional delivery
- 100 Skill Centres in English, Hindi and Foreign languages.
- Propose To Finish 1 Cr Houses By 2019 For Those Living In Kachcha Houses.
- Elimination of TB by 2025 is also targeted. Poverty is usually associated with poor health; action plan to tackle diseases such as leprosy, TB
- Have Hiked Allocation For Women Skill Development To Rs 1.84 Lakh Cr In FY18.
- For welfare of women and children, allocation of RS 1.84 crore is proposed.
- New rules regarding medical devices will be regulated, Propose To Amend Drug Rules To ensure Availability Of Drugs at Reasonable Prices.
- Two new AIIMS will be set up in Jharkhand and Gujarat
- Budget allocation for welfare of women and children increased to Rs 1,84,632 crore:
- Govt to introduce Sr Citizen Smart Health Card Scheme; LIC to come up special scheme. Aadharbased smart cards for senior citizens with their health details to be introduced LIC to introduce pension scheme for senior citizens with assured return of 8%
- Govt to set up dairy processing fund of Rs 8,000 crore over 3 years with initial corpus of Rs 2,000 crore
- 1.5 Lakh Health Sub-centres To Be Transformed To Health Wellness Centres.
Railways
- Merger of the Railway Budget with the Union Budget is a historic approach
- Railways to focus on 4 areas: passenger safety, capital & development works, cleanliness, financial & accounting reforms
- Railway safety fund to be launched, corpus of 1 lakh cr over 5 years. A safety fund to be set up with a corpus of Rs 1 lakh crore over five years
- 500 railway stations to be made disabled-friendly and All coaches will be fitted with biotiolets by 2019 and By 2019 all coaches to equipped with auto pilot
- Rs1.31 lakh crore capex fixed for Railways in 2017-18 including Rs 55,000 cr to be provided by govt.
- Dedicated trains for #tourism and #pilgrimage
- IRCTC not to collect service charge on e-tickets
- Govt to come up with New Metro Rail Policy to involve private investment
- To Commission 3,500 Km Of Railway Tracks In 2018.Railways To Implement End-to-end Solutions For Some Commodities.
- A New Metro Raliway policy will be introduced to improve urban transport and youth employment
- To Commission 3500 km Of Railway Lines In FY18.
- IRCTC will be listed. Focus on PSU divestment to continue with Railway subs and other government agencies
- 3,500 km railway lines to be commissioned in 2017-18 as against 2,800 km in 2016-17:
- National Highway Allocation At Rs 64,000 Cr.
- Highspeed optical fiber will be available more than 150,000 gram panchayats
- Airports Authority of India Act To Be Amended To Enable Monetisation Of Land.
- Total capital expenditure on Railways increased to 131000 crore from 121000 crore. Govt’s contribution will be 55,000 crore
- Airports in Tier II cities to be developed under PPP model
- Total allocation for infra stands at a record level of Rs 396000 crore
- Foreign Investment Promotion Board has been abolished. FIPB to be abolished and more than 95% of FDI to be under automatic route. FDI policies will be further liberalised
- A draft Bill to curtail illegal deposits scheme will be introduced shorty:
- To Take Up Second Phase Of Solar Power Development For Addl 20,000 MW.
- Rs 10,000 crore for recapitalisation of banks
- Evidence of increased digital transaction. Bhim app adopted by 125lakh people. Two new schemes to encourage transactions through BHIM app will be launched. Aadhar enabled payment system to be launched shortly. Banks will be incentivised to introduce 20 lakh Aadhar Pay terminals by September 2017
- Proposal to mandate all govt receipts as digital transactions, beyond a certain limit
- Will develop a centralised defence travel system. Now soldiers can now book tickets online. Web based distribution system for defence pensioners to address their grievances
- Head Post Offices in far flung areas of #India to render passport services. Head post offices to be used as the front office for Passport sevices
- Confiscation of properties of those fleeing from facing law proposed.
- intending to amend Negotiable Instrument Act to help quick realization in case of dishonored cheques
- Defence Expenditure Excluding Pension At Rs 2.74 Lakh Cr.
- Fiscal deficit targeted at 3.26% Fiscal roadmap of 3% of GDP Fiscal deficit for the next three years.
- Revenue deficit down in current fiscal; fixed at 1.9% for next fiscal
- As against 4.2 crore in organised sector, only Rs 1.7 crore rupees Income Tax returns filed. Only 7,781 companies have shown income of more than Rs 10 crore. From 3.5 cr individuals who filed tax returns, 99 lakh showed income below income tax slab. Out of 13.9 lakh cos 5.97 lakh foled tax retuens for AY 2016-17. Out of this 2.76 lakh show Losse or 0 income. Figures show we are largely a a tax non compliant society. When too many people evade taxes, the burden falls on honest people
- FY18 net market borrowing pegged at 3.48 lakh crore
- Net tax revenue for 2013-14 was 11.38 lak cr; this grew by 9% in 2014-15 and 17% in 2015-16
- Post #DeMonetisation Deposits Between Rs 2-80 Lakhs Made In 1.09 Cr Accounts. > Rs 80 lakh were deposited in more number of accounts-1.48 lakh cr A/Cs. While Rs 2 to Rs 8 lakh was deposited in 1.09 cr A/Cs
- Holding period for long-term cap gains for immobile assets reduced from 3 years to 2 years; base year for indexation to be 2001
- Highest ever advance tax collection in personal income tax in last three quarter of current FY
- Startups can carry forward losses for three years even if promoter holding goes below 51%. Definition of start-ups relaxed for qualification of external commercial borrowing.
- MAT can be carried forward by 15 years, it can be carried forward by 10 years currently. Govt. proposes carry forward of MAT Credit for a period of 15 years instead of 10 years
- To make MSME biz more viable, IT for cos with turnover of upto 50cr reduced to 25% from 30%
- Instead Of Build-up Area, Carpet Area Will Be Counted For Affordable Housing
- National Housing Bank will refinance loans worth Rs. 20,000 crore
- Banks to pay tax only on actual earnings on NPAs no accrued income tax.
- Basic customes duty on Liquified Natural gas reduced to 2.5% from 5%
- Maximum cash donation that a political party can receive from any source is Rs 2,000 Cash donation for charitable trust reduced from Rs 10000 to Rs 2000
- Presumptive tax on digital transactions – reduced to 6%
- Threshold limit under Section 40A(3) for payment of expenses in cash is reduced to Rs. 10,000
- Political parties will be entitled to receive donations by cheque or digital mode. An electoral bonds proposed redeemable in the accounts of legimate political parties
- Presumptive Income Scheme proposed to be extended for Turnover up to Rs. 2 Crore
- No TDS for insurance agents if income is below taxable limit + Scrutiny period reduced to 18 months
- Use of IT in taxation for reducing human interface.
- FM says not much change in indirect taxes as GST is on anvil