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Thursday, February 2, 2017

UNION BUDGET 2017-18 : HIGHLIGHTS !!!

GROSS DOMESTIC PRODUCT ESTIMATED TO GROW AT at 7.10 % for FY16 - FY17

AT CURRENT PRICES THE ADVANCE GDP ESTIMATE OF 2016 - 17 IS  Rs. 151,93,000 LAKHS CR AND AT 2011-12 PRICES ITS AT Rs. 121,55,000 LAKHS CR. 

FY17 FISCAL DEFICIT AT Rs. 5,47,000 CR.
FY17 TOTAL SUBSIDES AT Rs. 2,40,000 CR.
THE CENTER'S TOTAL REVENUE 2017-18 IS PROJECTED AT Rs. 19,11,578 Cr.
THE CENTER'S EXPENDITURE 2017-18 IS PROJECTED AT Rs. 21,46,735 Cr.
FY18 NET MARKET LOANS OF Rs. 3,48,000 CR.




INFLOWS (Rs. in Crs)                           
AMOUNT
CORPORATE TAX
 5,38,744
INCOME TAX
 4,41,255
CUSTOMS DUTY
 2,45,000
EXCISE DUTY
 4,06,900
SERVICE TAX
 2,75,000
TAX OF UNION TERRITORY          
 4,679
GROSS TAX REVENUES
 19,11,578 

NET TAX REVENUE (Rs. in Crs)
 12,27,000

STATES SHARE IN TAXES (Rs. in Crs)
 6,75,000

NON TAX RECEIPTS (Rs. in Crs)       
AMOUNT
INTEREST RECEIPTS
 19,000
DIVIDENDS & PROFITS
 1,42,000 
OTHER NON TAX RECEIPTS
 1,27,000 
           TOTAL
 2,88,000

NON DEBT CAPITAL RECEIPTS (Rs. in Crs) 
 84,000
DEBT RECEIPT (Rs. in Crs)
 5,47,000 
       TOTAL CAPITAL RECEIPTS 
 6,31,000

* NATIONAL CALAMITY CONTINGENCY DUTY (NCD) transferred to ncd fund Rs. 10,000 Cr. 

OUT FLOW (Rs. in Cr)
AMOUNT
 PENSION
 1,31,000
RURAL DEVELOPMENT
 1,29,000 
DEFENCE
 2,62,000
SUBSIDIES
 2,40,000
TRANSFER TO STATES
 1,37,000
INTEREST PAYMENTS
 5,23,000
OTHER GENERAL SERVICES
 2,14,000
TRANSPORT
 1,24,000
HOME AFFAIRS 
 84,000
EDUCATION
 80,000
ENERGY
 37,000
URBAN DEVELOPMENT
 41,000
SOCIAL WELFARE
 39,000
HEALTH & FAMILY WELFARE
 49,000
AGRICULTURE & ALLIED ACTIVITIES 
 57,000 

SOME MORE POINTS FROM BUDGET  

® Govt. committed to achieve Fiscal deficit target of 3.2 % of GDP for FY17-18 followed by fiscal deficit of 3.00 % for 2019. Abolition on plan, non-plan expenditure, focus on capital expenditure which will be 25.4 %.

® Existing rate of tax for Individuals between Rs. 2.5 lakhs to Rs. 5 lakhs reduced to 5 % from 10 %, all other categories of tax payers in subsequent brackets will get benefit of Rs. 12,500. A simple 1 page return for people with annual income of Rs. 5 lakh other than business income.

® Proposes to imply additional 10 % surcharge on individual income above Rs. 50 lakh and upto Rs. 1 Cr to make up for Rs. 15,000 Cr loss due to cut in persoanl I-T rate. 15 % surcharge on individual income above Rs. 1 Cr to remain. Proposes to have carry forward of MAT for 15 years. 

® Out of 13.14 lakh registered companies - only 5.97 lakh companies have filed returns for 2016-17. About 3.7 Cr individuals filed tax returns & 99 lakh showed income above 2.5 lakh, and 1.95 Cr individual showed income between Rs. 2.5 lakh to Rs. 5 lakh and out of 76 lakh individual assessees declaring income more than Rs. 5 lakh - 56 lakh are salaried. Only 24 lakh people showed income more than Rs. 10 lakhs. Only 1.72 lakh people showed income of more than Rs. 50 lakh a year but 1.25 Cr cars sold last year, 2 Cr Indians travelled aboard in 2015. 

® Propose to have NO CASH Transaction of more than Rs. 3 Lakh and a penalty of equal amount to be levied in case of breach. Limits the cash donation by charitable trust to Rs. 2000. Maximum amount of Cash donation for political parties will be Rs. 2000 from any one source but they will be entitled to receive donation by cheque or digital mode from donors. Amendment is proposed for and in RBI ACT whereby a donor can purchase these bonds from banks or post office via cheque or digital transaction, they can be redeemed only by registred political parties. Proposes to have carry forward of MAT for 15 years. And for MSME propose to reduce tax for small companies with turnover of upto Rs. 50 Cr to 25 %, 67 lakh companies fall in this category & 96 % of companies to get this benefit. The Revenue loss of Rs. 20,000 Cr.  

® Proposes to reduce basic customs duty for LNG to 2.5 % from 5 %. Rs. 10,000 Cr has been set aside for Banks recapitalisation, Rs. 64,000 Cr for National Highways, Rs. 10,000 Cr for BharatNet project to expand Broadband coverage. 

® Proposes to finish 1 Cr houses by 2019 for those living in kachcha houses and targets to construct roads which increased it pace to Rs. 133 km/day in 2017. To allocate Rs. 48,000 Cr to MGNREGA and would bring out 1 Cr rural families out of poverty and 100 % rural electricification by 2018.  .

®  Proposes to list PSE to foster public accountability with time bound listing, to create integrated public sector oil major. Also proposes to launch new ETF. The shares of Railways PSE like IRCTC would be listed and FIPB will be abolish in 2017-18. FPI category 1 and 2 investors exempted from indirect transfer provision. GST preparedness of IT system on schedule and not many changes to excise duties since GST will be implemented soon.

® To prevent evasion of capital gains tax via investment in bogus company, budget proposes long term capital gain tax on shares purchased after 1 OCT 2004, such transaction will be taxed at 10 % longterm capital gain tax if Securities Transaction Tax (STT) is not paid at the time of purchase.     .

® Proposes to bring out 1 Cr households out of Poverty by 2019. For affoardable housing the Area of 30 Sq.mtr (322.917 Sq.ft.) only in 4 metropolitan city limits and 60 Sq.mtr (645.835 Sq.ft.) for the rest of the country to be counted as Carpet area and NOT built-up area. And affoardable housing proect should be completed in 5 years from 3 years earlier. Tax on Notional rental income for builders to be calculated only after 1 year from the end of the year in which Completion Certificate is received.

® Proposes to reduce Holding period for Land or building or immovable properties for Capital Gains tax reduced from 3 years to now 2 years. Base year for counting the cost of property shifted from 1.4.1981 to 1.4.2001 for all assets including immovable property. For joint development agreement, the liability to pay capital gain tax will arise in the year in which project is completed. Capital Gains tax exempted for person holding land from which land was pooled for creation of State capital of Telangana. if land belonging to owners as on 2.6.2014. .

® Proposes concessional withholding rate of 5 % for interest received by foregin entities on loans given in India to be contiuned for another 3 years beyond June 20, 2017. Startups to get two relaxtation under the scheme of Income tax holiday given last year with the condition that continuous holding of 51 % voting rights to be relaxed as long as the original investment of promoter is not diluted and this exemption is available for 3 years out of any 7 years from the date of establishment instead of 3 years out of 5 years.  .

® Proposes deduction for provision for NPA of banks to be increased from 8.5 % instead of 7.5 % of profit. In case of NPA of Non-Scheduled Cooperative banks, interest to be recognised as income only when received.

® In the presumptive Income tax for small traders, income to be taken as 6 % of turnover which is received by digital or banking means. Cash expenditure allowable to be reduced to Rs. 10,000 from existing Rs. 20,000. The audit limit for business entites opting for presumptive scheme to be increased from Rs. 1 Cr to Rs. 2 Cr. Individual and HUF's not required to keep books of accounts if their turnover is upto Rs. 25 lakhs or income upto Rs. 2.5 lakhs. Professionals in presumptive scheme to pay advance tax only in one installment in March insted of four. TDS of 5 % not to be deducted for individual insurance agents if they certify their income to be below taxable limit.

® Proposes Domestic transfer pricing to be applied only if one of the two companies enjoys specified profit linked deduction  .

®  Proposes the time limit for revising tax return reduced to 12 months. Also time limit for completion of scrutiny will be brought down to 12 months from Assessment year 2019-20 onwards.  .




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3 comments :

  1. Very detailed insights... thanks for sharing!
    Have a great weekend :)

    ReplyDelete
  2. Quite an informative take on the budget, explained in simple language.

    ReplyDelete

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