Finance Minister Arun Jaitley presented presented the Union Budget 2017-18 in Parliament today., whose agenda was: “Transform, Energise and Clean India”.
Partially tilted towards socialist measures, the Budget has received mixed reviews, from being described as a path-breaking and revolutionary to being a populist one keeping in mind the forthcoming state elections.
Stock market fluctuated as announcements after announcements were made covering various aspects of the economy. By the end of the Budget announcements, Sensex had moved up 300 points, as stock prices of real estate, and financial corporations witnessed an upswing.
Here are the important highlights from business and finance sector, which every Entrepreneur should be aware of; besides highlights from tax changes, which will impact every tax-paying Indian citizen:
- Corporate tax for SMEs with less than Rs 50 crore turnover has been reduced to 25% from 30% earlier. This will positively impact 67 lakh registered companies in India, which is 96% of the total companies.
- No transaction above Rs 3 lakh would be permitted to use cash. This was a proposal by a Special Team to curb black money.
- Rs 2,41,387 crore has been set aside for infrastructural development of the transportation sector, covering Indian railways and Shipping industry.
- A special allocation of Rs 745 crore has been announced to boost electronics manufacturing sector in the country.
- A special scheme called Trade Infrastructure for Export Scheme has been announced to boost export infrastructure in the country.
- Under Digital Economy, Govt. has pledged to make sure that Rs 2500 crore of transactions happen via digital mode which includes Aadhaar Pay, UPI, Card based transactions and IMPS mode.
- Special mention of BHIM App was made, and it was announced that 1.25 crore people have installed this application for making digital payments
- Concessional withholding rate of 5% charges on interest earned by foreign entities in external commercial borrowings has been extended till June, 2020. FDI will get a major boost under this arrangement
- Presumptive income for small businesses having turnover of less than Rs 2 crore has been reduced to 6% from 8% currently.
- Threshold limit for audit of business (who opt for presumptive income) increased to Rs 2 crore from Rs 1 crore
- Foreign Portfolio Investor (FPI) exempted from indirect transfer provision
- Card readers for digital payments would now cost less as Excise duty, BCD and SAD has been relaxed
- Foreign Investment Promotion Board has been abolished as further liberalization steps for FDI will be introduced
- Bills would be introduced to curtail illicit deposit schemes and chit-funds mushrooming in the country
- A special Emergency Response Team would be established to check cyber crimes involving financial institutions like banks
- IPO of IRCTC, IRCON and IRFC (parts of Indian Railways) has been proposed
- Rs 10,000 crore would infused into public sector banks under Indradhanush plan
- A separate Payments Regulatory Board in the Reserve Bank of India would be established to monitor all digital payments, thereby replacing Regulation and Supervision of Payment and Settlement Systems
- Rs 4.11 lakh crore would be transferred to State and UT administrations
- Out of 13.14 lakh registered companies, only 5.97 lakh filed tax returns last year
- Out of 76 lakh individual taxpayers declaring income of more than Rs 5 lakh, 56 lakh were salaried employees
- Only 1.72 lakh taxpayers declared income of more than Rs 50 lakh a year
- Capital Gains tax would be exempted for those persons owning land
- Income Tax rate reduced from 10% to 5% for those taxpayers who are earning between Rs 2.5 lakh and 5 lakh
- For those who are earning below Rs 5 lakh a year, a single page IT return form would be introduced
- Taxpayers in other categories except Rs 2.5-Rs5 lakh bracket would get tax benefits amounting to Rs 12,500
- 10% surcharge on those who are earning between Rs 50 lakh and Rs 1 crore, this has been introduced to compensate Rs 15,000 crore loss in Income Tax revenues due to reduced tax slabs
You can read the entire Budget 2017 announcement here.