Budget Series: Taxation

-



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




Comments

Post a Comment

Popular posts from this blog

THE BIG FAT INDIAN WEDDING IS PERHAPS TOO FAT FOR OUR ECONOMY

-
Weddings are a feast anywhere in the world. But in India, weddings are a full blown festival with vibrant colors, jolly faces and beautiful memories. The Big Fat Indian weddings are as magnanimous as the ones shown in bollywood. Technically similar to any other (usually) small ceremony, a key difference is the money spent on everything. People usually spend all of their savings just to make that one day, a big day for them. So when it comes to weddings, Indian parents don’t even do any kind of cost-benefit analysis and it’s more like a reflex where the moment their children decide to get married, they open this treasure trove of money and jewellery that they have been collecting/saving since the day their children were born. Indian cinema has been the protagonist in this community wide change of preferences for weddings that people have recently had. But now the question that arises is- Is it worth it for people to spend all their savings in one day? Why have people changed their pref...
Read more

You've Been Served: India and the GDP Fudge

-
GDP i.e., Gross Domestic Product is defined as the final value of goods and services produced within a country in a specific time period - monthly, quarterly or annually. As per Samuelson and Northadaus in their seminal textbook, 'Economics', GDP gives an overall picture of the state of an economy just like a satellite in space surveys the weather across an entire continent. GDP enables policymakers, central banks, economists and businesses to analyze the impact of various policies and decisions made by the government for the economy. The task of measuring the economic activities of India and further releasing the GDP of the country is taken care of by the Central Statistical Organization (CSO) which releases the GDP quarterly in every Financial year. So, when CSO released the GDP of Q3 of FY16, there were many debates about the fudging done by the government to prove demonetization, as a big success. Some were of the view that the government was trying to fudge the actu...
Read more

Cryptocurrency And The Changing World

-
Cryptocurrency aims to revolutionise the way we transact in a world no longer only physical, but also virtual. It has aimed to remove middlemen such as our central banks and to give much power back to the people in the money market. And as expected, our governments are fighting back. There is a lack of clarity and homogeneity in how the states treat and think about cryptocurrency. A legitimate form of virtual money? A commodity? or a financial security? All these terms and labels have different ramifications because of which the values of cryptocurrencies have fluctuated so massively. While both sides on the debate of crryptocurrency fight, the world deals with the consequences. But what are these impacts on the global financial sector and world economy? Let's have a look. The use of cryptocurrencies does not require authorization by any middlemen which means there is no surveillance for what it is used. Transaction fees are minimal, as low as a couple cents for some cryptocurren...
Read more