UNION BUDGET 2018-19: RURAL, FARMERS & SENIOR CITIZENS

UNION BUDGET 2018-19: RURAL, FARMERS & SENIOR CITIZENS

Mr. Arun Jaitley, Finance Minister presented the budget for the financial year 2018-19 in Parliament on 01^st February, 2018 which was to strengthen various sectors like agriculture, MSME, health and education. He further added a series of structural reforms which will push India forward among the fastest growing economies of the world. Country firmly on course to achieve over 8 % growth as manufacturing, services and exports back on good growth path.

Agriculture and Rural Economy

Government proposed to raise volume of Institutional Farm Credit for agriculture sector to Rs.11 lakh crore for the year 2018-19 from 8.5 lakh crore in 2014-15.
MSP for all unannounced kharif crops will be atleast one and half times of their production cost.
Two New Funds with a total corpus of 10,000 crore announced for Fisheries and Animal Husbandary Sectors under the name of Fisheries and Aqua culture Infrastructure Development Fund (FAIDF) sector and an Animal Husbandry Infrastructure Development Fund (AHIDF).
“Operation Green” (a new scheme) launched to address price fluctuations in potato, tomato and onion for benefit of farmers and consumers with a corpus of 500 crore.
Proposition for developing existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) to protect the interests of 86% small and marginal farmers.
Re-structured National Bamboo Mission (termed Bamboo as “Green Gold”) gets 1290 crore.
Proposition has been made to extend the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital needs.

Air Transport

hawaai chappal wale bhi hawa mein udenge..

Proposition has been made to expand the airport capacity more than 5 times to handle a billion trips a year under a new initiative – NABH Nirman.
Under the Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the Government last year, 56 unserved airports and 31 unserved helipads would be connected.

Digital Economy

NITI Aayog will initiate a national program to direct efforts in artificial intelligence.
Department of Science & Technology will launch a Mission on Cyber Physical Systems to support establishment of centres of excellence for research, training and skilling in robotics, digital manufacturing, big data analysis, quantum communication and internet of things.

Defence

Proposition has been made to develop two defence industrial production corridors recognizing the sacrifices made by the Armed Forces.

Disinvestment

The Finance Minister announced disinvestment target of 80,000 crore for 2018-19.
3 Public Sector Insurance companies- National Insurance Co. Ltd., United India Assurance Co. Ltd., and Oriental India insurance Co. Ltd., will be merged into a single insurance entity which will boost the insurance sector.
Proposition to revise emoluments to 5 lakh, Rs. 4 lakh and Rs. 3.5 lakh per month for the President, the Vice President and to Governor respectively. These emoluments were last revised in 2006.

Education, Health and Social Protection

Estimated budgetary expenditure on health, education and social protection for 2018-19 is Rs.1.38 lakh crore against estimated expenditure of Rs.1.22 lakh crore in 2017-18.
Tribal students to get Ekalavya Model Residential School with Navodaya Vidyalayas to provide the best quality education with special facilities for preserving local art and culture in each tribal block by 2022. Welfare fund for SCs gets a boost.
Government would launch the Prime Minister’s Research Fellows (PMRF) scheme this year which would help 1,000 best B.Tech Students to avail the facilities to do Ph.D in IITs and IISc, with a handsome fellowship.
World’s largest Health Protection Scheme covering over 10 crore poor and vulnerable families launched with a family limit upto 5 lakh rupees for secondary and tertiary treatment.

Employment Generation

Government will contribute 12% of the wages of the new employees in the EPF for all the sectors for next 3 years.
Proposition to make amendments in the Employees Provident Fund and Miscellaneous Provisions Act, 1952 to reduce women employees’ contribution to 8% for first 3 years of their employment against existing rate of 12% or 10% with no change in employers’ contribution.
To create more employment, deduction of 30% on emoluments paid to new employees under Section 80-JJAA to be relaxed to 150 days for footwear and leather industry.

Fiscal Management & Taxation

Fiscal Deficit of 3% of GDP for the year 2018-19 has been projected.
Proposition to provide 100% deduction to companies registered as Farmer Producer Companies with an annual turnover upto 100 crore on profit derived from such activities, for a period of 5 years from financial year 2018-19 which will promote post harvest agriculture activities and also encourage “Operation Greens” announced earlier and would give a boost to the Sampada Yojana.
Turning to the real estate sector, the Finance Minister has proposed that no adjustment shall be made in respect of transactions in immovable property, where the Circle Rate value does not exceed 5% of the consideration. This would minimize hardship in real estate transactions.
No changes in Tax Rate of all persons except Companies.
Education Cess is being increased from 3% to 4% to be known as Education and Health Cess.
Long Term Capital Gain exemption allowed previously under section 10 (38) in respect of listed STT paid shares being withdrawn. However, capital gain upto 31^st January, 2018 shall not be taxed as cost of acquisition will be taken as Fair Market Value as on 31^st January, 2018.
Tax on STT paidLong Term Capital Gain will be 10% under section 112A. Further such tax will be liable for TDS.
Standard Deduction of Rs 40,000 for salaried employees. However, benefit of transport allowance of Rs 19,200 and Medical Reimbursement of Rs 15,000 under Section 17(2) are being withdrawn resulting into net benefit to salaried class only Rs 5,800.
Provision of Section 43CA, 50C and 56(2)(x) being amended to allow 5% of sale consideration in variation vis a vis stamp duty value on account of location, disadvantage etc.
Provision of section 40(ia), 40A(3) and 40A(3A) are being made applicable to Charitable Trust.
Agriculture Commodity Derivates income /loss also not to be considered as speculative under section 43(5).
Income Computation and Disclosure Standards(ICDS) being given statutory backing in view of decision of Delhi High Court decision. Marked to market loss computed as per ICDS to be allowed under section 36. Gain or loss in Foreign Exchange as per ICDS to be allowed under new section 43AA.
Construction Contract income to be computed on percentage completion method as per ICDS.
Valuation of Inventory including Securities to be as per ICDS.
Conversion of stock in trade to capital asset to be charged as business income in the year of conversion on Fair Market value on the date of conversion.
54EC benefit of investment in Bonds to be restricted to Capital gain on land and building only. Further period of holding being increased from 3 years to 5 years.
PAN to be obtained by all entities including HUF other than individuals in case aggregate of financial transaction in a year is Rs 2,50,000 or more. All directors, partners, members of such entities also to obtain PAN.
All companies irrespective of income need to file income tax return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact whether it has tax liability of Rs 3,000 or not.
Assessments to be E-assessed under new section 143(3A). No adjustment under section 143(1) while processing on account of mismatch with 26AS and 16A.
Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @ 30%.
Penalty for non filing financial return as required under section 285BA being increased to Rs 500 per day.

Relief to Senior Citizens has also been proposed. The proposals are :-

Increase in deduction limit for medical expenditure for certain critical illness from 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens under section 80DDB.
Hike in deduction limit for health insurance premium and/ or medical expenditure from 30,000 to Rs. 50,000 under section 80D.
Exemption of interest income under section 80TTA on deposits with banks and post offices are proposed to be increased from 10,000 to Rs. 50,000. TDS shall not be required to be deducted under section 194A. Benefit will also be available for interest from all fixed deposit schemes and recurring deposit schemes.
Concessions will give extra tax benefit of 4,000 crore to senior citizen. It is also proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March, 2020. The current investment limit is also proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.

Medium, Small and Micro Enterprises (MSMEs) and Employment

A corpus fund of 3794 crore has been provided for giving credit support, capital and interest subsidy and for innovations.
Proposition of 3 lakh crore for lending under MUDRA Yojana for 2018-19 after having successfully exceeded the targets in all previous years. MUDRA Yojana launched in April, 2015 has led to sanction of Rs.4.6 lakh crore in credit from 10.38 crore MUDRA loans. 76% of loan accounts are of women and more than 50% belong to SCs, STs and OBCs.