NEW DELHI (Commoditiescontrol) - A slew of measures for the agriculture and rural sectors, a new health insurance scheme for the poor and some relief in income tax for the salaried class and senior citizens, were announced by Finance Minister Arun Jaitley on Thursday in the last full budget before the general elections.
Below are the Major Highlights of Union Budget 2018-19
-Health and Education Cess- Presenting his fifth straight budget in the Lok Sabha, Jaitley raised the health and education cess, levied on all taxable income, to 4 per cent from current 3 per cent, and introduced a social welfare surcharge of 10 per cent to fund social welfare schemes.
-Corporate Tax- He lowered the corporate tax for small, micro and medium enterprises with turnover of up to Rs 250 crore to 25 per cent from current 30 per cent, while reintroducing the tax on long term capital gains of over Rs 1 lakh made from the sale of shares.
-Standard Deduction- While keeping the income tax rates and slabs unchanged, Jaitley introduced a Rs 40,000 Standard Deduction for salaried employees and pensioners in lieu of transport and medical expenses. The standard deducation allowed will benefit 2.5 crore people.
-Interest on bank deposits - For senior citizens, exemption of interest income on bank deposits was raised to Rs 50,000 from the current Rs 10,000, he said, adding that tax will not be deducted at source on fixed deposits.
-Medical Exemption- Also, exemption on medical expenses on critical illness has been raised to Rs 1 lakh, he said in his 110 minute speech.
-Capital Gains Tax- Jaitley said a 10 percent tax on long-term capital gains exceeding Rs 1 lakh made from the sale of shares has been introduced but those made till Janaury 31 would be grandfathered.
-Tax on Equity Mutual Funds - A 10 per cent tax on distributed income by equity oriented mutual funds has also been proposed in the budget.
-Customs duty- With excise duty and service tax being subsumed in the Goods and Services Tax (GST), Jaitley made changes only in customs duty -- raising them in case of mobile phones and lowering for raw cashew.
-Agriculture- MSP on Crops- Stating that the focus of the government in the coming fiscal would be agriculture and rural India, the Finance Minister announced that all Kharif crop would be paid a minimum support price (MSP) that is 50 percent more than the cost of production.
He announced that credit to agriculture would be raised to Rs 11 lakh crore in the coming fiscal from Rs 10 lakh crore.
Kisan credit card will be extended to fisheries and animal husbandary farmers while Rs 2,000 crore provided for development of agri market.
-Universal healthcare- In a bid to provide universal healthcare, he announced a 'National Health Protection scheme' to provide health cover of upto Rs 5 lakh to each of the 10 crore poor family per year.
-Fiscal Deficit- But to fund these, he let go on the fiscal consolidation roadmap. As a result, fiscal deficit for current fiscal will widen to 3.5 per cent of the GDP as against 3.2 per cent previously targeted, and to 3.3 per cent in FY'19 as opposed to 3 per cent previously targeted.Fiscal deficit in 2016-17 was 3.5 per cent of the GDP.
"We have worked sincerely without thinking about the political cost," he said.
-Tax Exemption for Farm Producers Companies- Jaitley also announced 100 percent tax deduction for farm producer firms with Rs 100 crore turnover.
-EPFO/PF contribution- Employees PF Act will be amended to reduce contribution of women to 8 per cent from 12 per cent for first three years, with no change in employer's contribution, Jaitley said.
The Government will contribute 12 percent of wages of new employees in EPF for all sectors for the next 3 years, he said.
-Textille Sector- He said Rs 50 lakh crore is needed for infrastructure building and Government will allocate Rs 7,140 crore for textiles sector in next year.
(By Commoditiescontrol Bureau; +91-2-40015533)
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