Do you know what does TV does to you… It gives you NEWS. And, this is the worst thing as news gives you a superficial CONFIDENCE and not the KNOWLEDGE. If you are really glued to the never ending panel discussions on all the channels regarding budget, please rest your eyes, because we are gonna give you INFORMATION & KNOWLEDGE about the CHANGES that are announced in BUDGET 2017.
Click Here for : Finance Minister’ s Budget 2017-18 Speech
Click Here for : Key Features of Budget 2017-18 as issued by Ministry of Finance
Budget 2017, will be a remarkable budget we all knew. It’s at the juncture when the economy is just getting remonetize again. The country is going through a change in the payment system and Paytm, Airtel payment bank has become common words now. This is the 4th Budget for Mr. Arun Jaietly and he has no option but to – act upon what his government, his economic advisor and above all our PM has been saying.
Some would say “it’s revolutionary, and some would say “no big deal”. What really matters is:
- Is the new change good for me, my countryman, my nation?
- Does it bring me extra, maybe not today but after some time? Maybe not directly but helps in long run.
The Budget 2017 will really put your hopes up. This does not mean it is pure like sin. It means it has more positives than the negatives. Let’s see what was good, bad and ridiculous in the budget 2017-18.
We wanted a lot of more slabs, reduced tax rate, more on 80C benefits, more on allowances but we got just one thing – 5% in the 2.5 lakhs to 5 Lakhs Slab!!! I am not thrilled as this was below the expectation.
- Tax Rebate of Rs 2500 for below 5 Lakhs Income slab and Rs 12500 for Taxpayers in Income Tax slabs of 20% & 30%.
But the government gave a lot of figures that they wanted to include more people to pay taxes and until then they have no mood to forgo tax earnings. So, maybe next year when more citizen come forward we may see some help.
- 10% Surcharge for people in 50 Lakh to 1 Cr income slab.
- A Single Page Income Tax Return Form to be introduced (Not if you have business income).
- If you are not filling tax for the first time, NO SCRUTINY by IT Departments for 3 years (Provided no high-value transactions are found).
Cash Transaction above 3 Lakhs banned for individuals: This is to eliminate black money. Last year it was 2 Lakhs proposed but now increased to 3 Lakhs. Boosting and encouraging Black Money???
GST on schedule: July 2017
Presumptive Income Tax slashed to 6% from earlier 8%.
Service charge on booking tickets trough IRCTC website withdrawn.
Rajiv Gandhi Equity Saving Scheme (RGESS) to be phased out.
Set off of loss under the head “income from house property” is now limited to INR 2 lakhs per year.
The base year for calculating LTCG with indexation changed to 01 April 2001 from 01 April 1981.
This is good that Government has realized that overall growth cannot be achieved if Housing Sector goes down. And, the crash has happened because of Demonetization.
- Housing Sector to be included as Infra Projects so that they get funding from Infra-Project Funds.
- Long Term Capital Gain reduced from 3 Years to 2 Years. (Will help people who are stuck. The transactions will increase)
- New investments to be announced to save LTCG other than the conventional 54EC products.
One of the ways to increase profits is to reduce Corporate Tax Rate so that the share price increases. This will be beneficial for all who are investing in these companies directly or through securities like MFs, Insurance or NPS etc. But NO SUCH ANNOUNCEMENT.
- The tax rate for Micro, Small & Medium Enterprises (MSME) with turnover below 50 Cr reduced from 30% to 25%. But the majority are unlisted. So investors do not get anything, only promoters gain.
- Government to facilitate formation of one big OIL Company (means merging the existing oilcos)
- BHIM will have 2 more promotional schemes one for us to refer new users and another cashback scheme for merchants. Schemes to be announced.
- Senior citizens to get Aadhar enabled electronic identity cards with their health records.
- Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly.
I include these as these are long hands and help everyone around us.
The fiscal deficit comes down to 3.2% of GDP. Revenue Deficit down to 1.9%. This is good as it shows financial discipline on the government expenditure and FIIs, long-term investors & research guys just love this. More money to flow in capital markets.
Inflation: The government will manage inflation and propose to keep it under 4%. This is huge as money saved on account of price rise goes to expenditures and investments. More money in hands of homemakers. More credit off take. Very good for long term growth. I heartily applaud RBI and FM for this.
- 2 More Oil reserves proposed. 3 already operational. Good as we are oil importing country and we must have a buffer for emergencies.
- Forex Reserve all time high to cover 12 months import bill. (Remember 1991, when we had to pledge gold against our imports).
This is a massive advantage and positive point. The government has been infra centric and trying to follow Chinese model of growth.
Results are visible too. For example, we are now building 113 Km of roads under PM Sadak Yojna fork earlier 73 Kms per day.
- Additional 3500 km railway lines proposed.
- Budgets for Road Transport, Airports, Sea Transport & Ports increased.
- New Metro Rail Policy to be announced soon.
Tourism: Five special zones to be set up
Total allocation for infrastructure: Rs3.96 trillion (Highest Ever)
Agriculture & Rural
This government knows that India is based out of villages. They need to increase farm productivity, provide jobs to youth in villages and health to rural areas.
- Increase in farm output by 4.2%. Means if rains are good, we have low inflation.
- Farmer credit fixed at record level of Rs10 trillion; will ensure adequate flow to underserved areas
- 2 new AIIMs in Jharkhand and Gujrat. (BJP has announced 6 AIIMS in UP already in their UP election manifesto!!!)
- Women: Mahila Shakti Kendras with Rs500 crore corpus.
- Propose to leverage IT with the launch of SWAYAM platform for virtual learning.
The “Whatsapp Hate Campaign” against political parties accepting cash up to 20k, has reached right ears. Now they can take only Rs 2000 in cash. So a person wanting to donate has to do by cheque or UPI only. If he wants to make this anonymous, he can purchase the newly announced “donation bonds” from RBI and transfer them to political party’s account (Details Awaited).
Some Bad & Ridiculous Points
Cash Transaction above 3 Lakhs stopped completely: What if my family member needs a surgery and expenditure is above 5 Lakhs? If I don’t have money and I get them as help from friends in cash. Say 50000 from one or 80000 from one, do I need to accumulate them in a bank account and pay to the hospital? I am waiting for details to find an answer.
Head Post Office for Passport: Post Office seems to be used for anything that comes in Government mind. They disbursed notes during demonetization, now passports. Infrastructure deficient ministry of external affairs think this will help, but I think passports need to be handled by a professional organization and people. That is why they have TCS employees in all main passport offices.
High-Level Panel to celebrate 150 Years Mahatma Gandhi’s birth anniversary: If he would have been around, the only thing he would have wanted is – SIMPLICITY. But our government has fancy of making large statues and memorials. Hope this panel does not mean “some more burden on tax saver’s money”.
Hey, the Budget becomes ACT from 1 April 2017 but the finer details and modifications may come in coming days. I will revise the article accordingly.
Do share what you think about this Budget.
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