Budget Series: Taxation

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Presenting the Budget 2018 the Finance minister said as government had made many positive changes in the personal income-tax rate applicable to individuals in the last three years. Therefore, govt do not propose to make any further change in the structure of the income tax rates for individuals. It has only increased 1% cess on personal income tax.
Budget 2018 proposed a standard deduction of Rs40,000 in lieu of transport allowance and medical reimbursement, giving relief to the salaried people(a revenue sacrifice of Rs8,000 crore for govt).Some of the experts say that it is a very nominal for the salaried people as earlier  medical expense reimbursement of 15,000 per annum and transport allowance exemption of Rs1,600 per month was anyway leading to a total tax-free salary of Rs34,200.
Also, Budget 2018 has reduced the corporate tax rate for companies with an annual turnover of up to Rs250 crore to 25%.This will benefit the the micro, small and medium enterprises (MSMEs) but not big corporates. Corporate tax cut will help the entire MSME sector and account for 99% of the companies filing tax returns. Because the of this tax cut government will have to forego revenue of Rs7,000 crore.
Earlier there was no restriction on trust and institutions  for incurring expenditure in cash but In order to have audit trail of the expenses incurred by these entities, govt has proposed that payments exceeding Rs. 10,000 in cash made by such entities shall be disallowed and the same shall be subject to tax.
In the past fews years Stock market has witnessed unprecedented rise. Seeing this the Government has proposed a 10% tax on long term capital gains tax on equities.
The cess on moblie phones has been increased by 5% and 7.5 % on televisions. This step has been taken by the govt to encourage production in India. Industry experts say, the customs duty hike will push foreign players towards manufacturing and sourcing components more within the country. This would also increase job opportunities in the sector.


Source:
 http://www.livemint.com/Politics/bfRo3KQlrXNqNGl7QjlqnL/Budget-2018-Standard-deduction-of-Rs40000-on-transport-me.html

http://www.firstpost.com/tech/news-analysis/budget-2018-customs-duty-hike-of-5-on-mobile-phones-to-force-major-brands-to-pass-on-burden-to-consumers-4330797.html




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