Now as the central government has introduced the union budget 2018, there were lots of speculation on the budget due to the expectation of industries coping with goods and services tax earlier. On 1st February 2018, the finance minister Arun Jaitley stated the union budget 2018 in front of the nation.
Here we have discussed some of the main features and introductions of union budget 2018 as presented by the finance minister Arun Jaitley. There are a lot of exemptions and declarations made under the union budget 2018 which can be summed up in the below-given points:
Features Of Union Budget 2018
- There will be no change in Tax Rate. All taxpayers comprising Companies, Firms, HUF, and individuals will require paying the tax at the same rate. Although, the Education cess is expected to increase from 3 to 4% which is known as Health and Education Cess.
- Although, concerning Domestic companies which come under a turnover or gross receipts of under Rs. 250 Crores will be responsible to pay tax at 25% in the Financial year 2016-17 as compared to present limit of Rs 50 crore in the Financial year 2015-16.
- The long-term Capital gain exemption under section 10(38) in relation to listed STT paid shares can be withdrawn.
- Although, capital gain earned up to 31.1.2018 will not be liable to pay tax because the cost of acquisition will be considered as Fair Market Value as on 31.1.2018.
- Tax on STT paid long-term capital Gain is put to charge 10% under Section 112A. Ahead, the paid tax will come under TDS.
- There is a Standard Deduction of Rs 40,000 for employees earning salaries. Although, the benefit of Medical Reimbursement of Rs 15,000 and transport allowance of Rs 19,200 is available under Section 17(2) can be eliminated. Therefore, the total profit to salaried class employees will be only Rs 5,800.
- Rules under section 50C, 56(2)(x), and 43CA are revised to meet 5% of sale consideration in change as stamp duty value by considering a disadvantage, location, etc.
- Rules under section 40A(3), 40A(3A), and 40 (ia) are made accordingly for Charitable Trust. Therefore, spending raised without deduction of tax and in cash mode will not be accountable as an application of income under section 11(1)(a), and 10(23C).
- Under Section 43(5), Agriculture Commodity Derivatives income or loss will also not included as in the thought of speculative.
- Income Computation and Disclosure Standards(ICDS) will be provided statutory supporting because of Delhi High Court decision.
- Noted to market loss accounted according to ICDS to be included under section 36.
- Gain or loss in Foreign Exchange according to ICDS to be included under new section 43AA.
- Construction Contract income to be accounted on the basis of percentage completion method according to ICDS.
- Valuation of Inventory comprising Securities to be according to ICDS.
- The subsidy, Interest on compensation, incentives, and enhanced compensation are liable to tax in the year of receipt according to Section 145B.
- Conversion of stock in trade to the capital asset is liable to be charged in relation to business income in the year of conversion based on Fair Market value in terms of the date of conversion.
- 54EC benefit of investment in Bonds is to be limited to Capital gain on land and building. Ahead, the period of holding is enhanced from 3 years to 5 years.
- PAN is required to be acquired by all entities comprising HUF other than individuals if, in a year, the aggregate of financial transaction is equal or above Rs 2,50,000. All partners, members, directors of such entities are required to obtain PAN as well.
- All companies without concern of income are required to file a return and if it is not done, those companies are put under the prosecution without giving thought that whether the company has a tax liability of Rs 3,000 or not.
- Under the new section of 143(3A), Assessments to be considered as E-assessment.
- There will be no adjustment under section 143(1) at the time of processing on account of a mismatch with 26AS and 16A.
- Deemed dividend to be liable for tax under company norms itself as Dividend Distribution of tax @ 30%.
- The penalty for not furnishing financial return is mentioned under section 285BA can be increased to Rs 500 per day.
Highlights of Rajasthan Government Budget 2018
- On the announcement of the last budget presented by the current Rajasthan state government, chief minister Vasundhara Raje mentioned the elongated benefits of goods and services tax to the state government.
- The CM stated that the goods and services tax brought around 623 crores of benefit to the state government with over 1.81 lakh new taxpayers registered under the new goods and service tax ambit.
- The chief minister said that Rajasthan also got 1911 crores as an compensation in this time period and up to October month due to the blessings of GST and its provisions.
- While the compensation of 751 crores for the time period of November – December 2017 is also underway and can be anytime reimbursed. The minister said that due to the GST, even the common man has benefitted along with the trader’s community.
- Under the GST ambit, many industries like Marble, granite, handicrafts, tourism, Gems and jewellery have got reduced tax rates and have benefitted with it. She emphasized that under the GST scheme, the state government is helping the traders by the means of various GST Kendra.
What was Expected from the Union Budget 2018
Earlier there was a lot of expectations from the union budget which was discussed by many states in joint meetings conducted at official offices. We have gathered all those particular points related to the common man expectations:
Income Tax Slab Range Extension
After demonetization, it was expected from the government to increase income tax slab from Rs. 2.5 lakh to 5 lakh but it wouldn’t happen. In a meeting with Finance minister, labour organizations demanded to increase input tax slab up to Rs. 5 lakh.
GST Slab Reduction
It was expected from the central government that it could change the GST slab further. As the existing slabs in GST include 0, 5, 12, 18, 28 tax rates, the GST council can further tweak the GST rates and merge 12 and 18 slabs into one slab.
Home Purchasing Affordability
It was expected that the finance minister includes property under the GST range in upcoming time.
Chance Of Employment Was Expected
The government was expected to announce national employment policy also. This policy was to focus on social, economic, and labour policies to make a roadmap for employment plan.
Villagers were Expecting More Benefits
The government can try to improve the declining graph of agriculture and focus on the improvement of farmers’ conditions. The agriculture export industry is declining day by day and this has impacted the graph with the 21% downfall in the financial year 2016-2017. So, to improve agriculture export sector, the government was expected to take the certain decision in favour of agriculture’s production.
