The following are the important highlights of the budget speech by finance minister Arun Jaitley for the year 2018-19.
UPDATE: To read what Jaitley said about the imposition of tax on equity transactions, click here.
To read his full speech, click here.
The following are the major announcements of the Budget 2018-19.
EQUITY MARKETS
Long-term capital gains exceeding Rs 1 lakh to be taxed at 10% with no indexation benefit. Equity mutual funds’ distributions to be taxed at 10% to bring them on par with other mutual funds. Tax of 15% on short-term gains on equity investments of less than 1 year to continue.
BLACK MONEY
Payments by trusts and charities amounting to more than Rs 10,000 to be taxed.
PERSONAL TAX
For last year, Rs 1.85 cr salaried employees paid 1.44 lakh cr, or an average of Rs 76,306 per salaried employee.
In business class, 1.88 cr individual business tax payers, including professionals, amounting to Rs 48,000 cr. Average payment was Rs 25,753.
Will provide a standard deduction of Rs 40,000 in lieu of transport and medical reimbursements to salaried employees. Medical reimbursements in case of hospitalization will continue. This will benefit 2.5 cr salaried and pensioned persons.
Tax slabs remain unchanged.
CORPORATE TAX
Cut tax rate of only 25% for companies with turnover up to Rs 250 cr for FY17 from 30%. This will benefit 99% of the 7 lakh companies filing taxes.
GOVT FINANCES
Total revised estimates for expenses of current year at Rs 21.57 lakh cr against 21.47 cr estimate.
Current year fiscal deficit likely at 3.5% of GDP. Fixing a target of 3.3% for next year.
Personal income tax increased (buoyancy) by 1.95% and 2.11%, generating a total of Rs 90,000 cr increase.
Will continue to take all measures to curb black money.
41% more returns filed under presumptive income schemes.
MISC
MPs’ salaries to be refixed.
DISINVESTMENT
Several unlisted state-owned insurance companies to be merged and then listed.
Rs 1 lakh cr estimated proceeds this year, estimate next year disinvestment revenue of Rs 80,000 cr.
DEFENCE
To bring out ‘industry-friendly’ defense production policy in the coming year.
To create tunnel under Sela Pass in Arunachal Pradesh.
IT & TELECOM
To set up 5 lakh Wifi hotspots in rural areas.
To set up 5G test bed at IIT Chennai.
To block cryptocurrencies in financing illegal activities and payments.
FINANCE
Will move A rated corporate bonds to investment grade.
RAILWAY
All trains will be provided with Wifi progressively.
First train set with advanced features from Perambur factory will be commissioned in the coming year.
Suburban railway network to be set up for Bangalore.
TRANSPORTATION
Toll Operate and Transfer and Infrastructure Investment funds to monetize road assets of NHAI.
WOMEN
Women need to contribute only 8% to EPF funds for the first three years of their employment, down from 10-12%.
SMALL INDUSTRIES
To link banks to a national financial data network to ease disbursal of loans to MSMEs.
Tax benefits to be extended to MSMEs.
Rs 3 lakh cr to be disbursed under Mudra loans next financial year.
HEALTH
Allocate Rs 1,200 cr for setting up new centers to treat both communicable and non-communicable diseases across India.
National Health Protection Scheme for 10 cr poor and vulnerable families providing up to Rs 5 lakh per year for secondary and tertiary treatment. The scheme, under Ayushman India program, will be the world’s largest government-funded healthcare program. It will be expanded depending on the results of the program.
Rs 500 per month to be given to all TB patients to enable them to buy nutritious food.
One medical college to be ensured for every three parliamentary constituencies.
EDUCATION
To move from blackboard to digital board.
PM’s research scheme to enable 1,000 engineering students to do research in IIMs and IITs.
POVERTY
Ujjwala free LPG connection expanded to 8 cr connections from Rs 5 cr.
To create 2 cr toilets in the next financial year.
AGRICULTURE
Will focus on ease of living and not just ease of doing business now.
Will give 1.5 times of cost as minimum support price for Kharif (monsoon) crops as well.
Rs 500 cr allocated for Operation Green to be launched for strengthening of cold chain.
Export of agri-commodities to be liberalized, 42 mega food parks to be set up.
To set up a system to purchase surplus solar power generated by farmers.
Rs 10,000 cr allocated to set up funds for fisheries and animal husbandry sector.
ECONOMY
We hope to grow GDP at 7.2% to 7.5% in the second half of the current financial year.
On course to achieve a growth of 8%-plus