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RAPID (Revenue, Accountability, Probity, Information and Digitisation) in Budget 2017 - 2018 Maximise efforts for e-assessment in the coming year Enforcing greater accountability of officers of Tax Department for specific act of commission and omission

GOODS AND SERVICES TAX (GST) in Budget 2017 - 2018 The GST Council has finalised its recommendations on almost all the issues based on consensus on the basis of 9 meetings held Preparation of IT system for GST is also on schedule. The extensive reach-out efforts to trade and industry for GST will start  from 1st April, 2017 to make them aware of the new taxation system.

PERSONAL INCOME-TAX in Budget 2017 - 2018 Existing   rate  of  taxation  for  individual  assesses  between  income of 2.5 lakhs to 5 lakhs reduced to 5% from the present rate of 10% Surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between `50 lakhs and ` 1 crore Simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income upto ` 5 lakhs other than business income Appeal to all citizens of India to contribute to Nation Building by making a small payment of 5% tax if their income is falling in the lowest slab of 2.5 lakhs to 5 lakhs.

EASE OF DOING BUSINESS in Budget 2017 - 2018 Scope of domestic transfer pricing restricted to only if one of the entities involved in related party transaction enjoys specified profit-linked deduction Threshold limit for audit of business entities who opt for presumptive income scheme increased from ` 1 crore to ` 2 crores. Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs Foreign Portfolio Investor (FPI) Category I & II exempted from indirect transfer provision. Indirect transfer provision shall not apply in case of redemption of shares or interests outside India as a result of or arising out of redemption or sale of investment in India which is chargeable to tax in India Commission payable to individual insurance agents exempt from the requirement of TDS subject to their filing a self-declaration that their income is below taxable limit Under scheme for presump...

TRANSPARENCY IN ELECTORAL FUNDING in Budget 2017 - 2018 Need to cleanse the system of political funding in India Maximum  amount  of cash donation, a  political party  can receive, will  be 2000/- from one person. Political parties will be entitled to receive donations by cheque or digital mode from their donors. Amendment to the Reserve Bank of India Act to enable the issuance of electoral bonds in accordance with a scheme that the Government of India would frame in this regard. Every political party would have to file its return within the time prescribed in accordance with the provision of the Income-tax Act Existing exemption to the political parties from payment of income-tax would be available only subject to the fulfilment of these conditions

PROMOTING DIGITAL ECONOMY  in Budget 2017 - 2018 Under scheme of presumptive income for small and medium taxpayers whose turnover is upto 2 crores, the present, 8% of their turnover which is counted as presumptive income is reduced to 6% in respect of turnover which is by non-cash means No transaction above ` 3 lakh would be permitted in cash subject  to certain exceptions Miniaturised POS card reader for m-POS (other than mobile phones or tablet computers), micro ATM standards version 1.5.1, Finger Print Readers / Scanners and Iris Scanners and on their parts and components for manufacture of such devices to be exempt from BCD, Excise/CV duty and SAD

MEASURES FOR STIMULATING GROWTH in Budget 2017 - 2018 Concessional withholding rate of 5% charged on interest earned by foreign entities in external commercial borrowings or in bonds and Government securities is extended to 30.6.2020. This benefit is also extended to Rupee Denominated (Masala) Bonds For the purpose of carry forward of losses in respect of start-ups, the condition of continuous holding of 51% of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues. Also the profit (linked deduction) exemption available to the start-ups for 3 years out of 5 years is changed  to 3 years out of 7 years MAT credit is allowed to be carried forward up to a period of 15 years instead of 10 years at present In order to make MSME companies more viable, income tax for companies with annual turnover upto ` 50 crore is reduced to 25% Allowable provision for Non-Performing Asset of Banks increased from 7.5% to 8.5%. Inte...

PROMOTING AFFORDABLE HOUSING AND REAL ESTATE SECTOR in Budget 2017 - 2018 Between 8th November and 30th December 2016, deposits between 2 lakh Rupees and 80 lakh Rupees were made in about 1.09 crore accounts with an average deposit size of ` 5.03 lakh. Deposits of more than 80 lakh were made in 1.48 lakh accounts with average deposit size of ` 3.31 crores. Under the scheme for profit-linked income tax deduction for promotion of affordable housing, carpet area instead of built up area of 30 and 60 Sq.mtr. will be counted. The 30 Sq.mtr. limit will apply only in case of municipal limits of 4 metropolitan cities while for the rest of the country including in the peripheral areas of metros, limit of 60 Sq.mtr. will apply For builders for whom constructed buildings are stock-in-trade, tax on notional rental income will only apply after one year of the end of the year in which completion certificate is received Reduction in the holding period for computing long term  capital g...

PRUDENT FISCAL MANAGEMENT in Budget 2017 - 2018 Stepped up allocation for Capital expenditure by 25.4% over the previous year Total resources being transferred to the States and the Union Territories with Legislatures is ` 4.11 lakh crores, against ` 3.60 lakh crores in BE 2016-17 For the first time, a consolidated Outcome Budget, covering all Ministries and Departments, is being laid along with the other Budget documents FRBM Committee has recommended 3% fiscal deficit for the next three years, keeping in mind the sustainable debt target and need for public investment, fiscal deficit for 2017-18 is targeted at 3.2% of GDP and Government remains committed to achieve 3% in the following year Net market borrowing of Government restricted to ` 3.48 lakh crores after buyback in 2017-18, much lower than ` 4.25 lakh crores of the previous year Revenue Deficit of 2.3% in BE 2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is pegged at ...

PUBLIC SERVICE in Budget 2017 - 2018 The Government e-market place which is now functional for procurement of goods and services To utilise the Head Post Offices as front offices for rendering passport services A Centralised Defence Travel System has been developed through which travel tickets can be booked online by our soldiers and officers Web based interactive Pension Disbursement System for Defence Pensioners will be established To rationalise the number of tribunals and merge tribunals wherever appropriate Commemorate both Champaran and Khordha revolts appropriately

DIGITAL ECONOMY in Budget 2017 - 2018 125 lakh people have adopted the BHIM app so far. The Government will launch two new schemes to promote the usage of BHIM; these are,  Referral Bonus Scheme for individuals and a Cashback Scheme for merchants Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will  be launched shortly A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards A proposal to mandate all Government receipts through digital means, beyond a prescribed limit, is under consideration Banks have targeted to introduce additional 10 lakh new POS terminals by March 2017. They will be encouraged to introduce 20 lakh Aadhar based POS by September 2017 Proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems

FINANCIAL SECTOR in Budget 2017 - 2018 Foreign Investment Promotion Board to be abolished in 2017-18 and further liberalisation of FDI policy is under consideration An expert committee will be constituted to study and promote creation of an operational and legal framework to integrate spot market and derivatives market in  the  agricultural  sector,  for  commodities  trading.  e- NAM to be an integral part of the framework. Bill relating to curtail the menace of illicit deposit schemes will be introduced. A bill relating to resolution of financial firms will be introduced in the current Budget Session of Parliament. This will contribute to stability and resilience of our financial system A mechanism to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP and public utility contracts will be introduced as an amendment to the Arbitration and Conciliation Act 1996. A Com...

INFRASTRUCTURE in Budget 2017 - 2018 For transportation sector as a whole, including rail, roads, shipping, provision of ` 2,41,387 crores has been made in 2017-18. For 2017-18, the total capital and development expenditure of Railways has been pegged at ` 1,31,000 crores. This includes ` 55,000 crores provided by the Government For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a corpus of ` 1 lakh crores over a period of 5 years Unmanned  level  crossings  on  Broad  Gauge  lines  will  be  eliminated   by 2020 In the next 3 years, the throughput is proposed to be enhanced by 10%. This will be done through modernisation and upgradation of identified corridors. Railway lines of 3,500 kms will be commissioned in 2017-18. During 2017-18, at least 25 stations are expected to be awarded for station redevelopment. 500 stations will be made differently abled friendly by providing lifts and esca...

THE POOR AND THE UNDERPRIVILEGED in Budget 2017 - 2018 Mahila Shakti Kendra will be set up with an allocation of ` 500 crores in 14 lakh ICDS Anganwadi Centres. This will provide one stop convergent support services for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition Under Maternity Benefit Scheme ` 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children Affordable housing to be given infrastructure status National  Housing  Bank  will  refinance  individual  housing  loans  of about` 20,000 crore in 2017-18 Government has prepared an action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018, Measles by 2020 and Tuberculosis by 2025 is also targeted Action plan has been prepared to reduce IMR from 39 in 2014 to 28 by 2019 and MMR from 167 in 2011-13 to   100 ...

YOUTH in Budget 2017 - 2018 To introduce a system of measuring annual learning outcomes in our schools Innovation Fund for Secondary Education proposed to encourage local innovation for ensuring universal access, gender parity and quality improvement to be introduced in 3479 educationally backward districts. Good quality higher education institutions to have greater administrative and academic autonomy SWAYAM platform, leveraging IT, to be launched with at least 350 online courses. This would enable students to virtually attend courses taught by the best faculty National Testing Agency to be set-up as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions Pradhan Mantri Kaushal Kendras to be extended to more than 600 districts across the country. 100 India International Skills Centres  will  be established across the country. Skill Acquisition and Knowledge Awareness for Livelihood Promo...

RURAL POPULATION in Budget 2017 - 2018 Over ` 3 lakh crores spent in rural areas every year, for rural poor from Central Budget, State Budgets, Bank linkage for self-help groups, etc Aim to bring one crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019, the 150th birth anniversary of Gandhiji Against target of 5 lakh farm ponds under MGNREGA, 10 lakh farm ponds would be completed by March 2017. During 2017-18, another 5 lakh farm ponds will be taken up Women participation in MGNREGA has increased to 55% from less than 48% MGNREGA allocation to be the highest ever at ` 48,000  crores  in  2017-18. Pace of construction of PMGSY roads accelerated to 133 km roads per day in 2016-17, against an avg. of 73 km during 2011-2014 Government has taken up the task of connecting habitations with more than 100 persons in left wing extremism affected Blocks under PMGSY. All such habitations are expected to be covered by 2019 and the allo...

FARMERS in Budget 2017 - 2018 Target for agricultural credit in 2017-18 has been fixed at a record level of ` 10 lakh crores Farmers will also benefit  from  60  days’  interest  waiver  announced  on 31 Dec 2016 To ensure flow of credit to small farmers, Government to support NABARD for computerisation and integration of all 63,000 functional Primary Agriculture Credit Societies with the Core Banking System of District  Central Cooperative Banks. This will be done in  3 years at an estimated  cost of ` 1,900 crores Coverage under Fasal Bima Yojana scheme will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19 for which a budget provision of ` 9000 crore has been made New mini labs in Krishi Vigyan Kendras (KVKs) and ensure 100% coverage  of all 648 KVKs in the country for soil sample testing As announced by the Honourable Prime Minister, the Long Term Irrigation Fund already set up in ...

ROADMAP & PRIORITIES in Budget 2017 - 2018 Agenda for 2017-18 is : “Transform, Energise and Clean India” – TEC India TEC India seeks to Transform the quality of governance and quality of life  of our people; Energise various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and Clean the country from the evils of corruption, black money and non-transparent political funding Ten distinct themes to foster this broad agenda: Farmers : committed to double the income in 5 years; Rural Population : providing employment & basic infrastructure; Youth : energising them through education, skills and jobs; The Poor and the Underprivileged : strengthening the systems of social security, health care and affordable housing; Infrastructure:  for efficiency, productivity and quality of life; Financial Sector : growth & stability by stronger institutions; Digital Economy :  for spee...

DEMONITISATION in Budget 2017-2018 Bold and decisive measure to curb tax evasion and parallel economy Government’s resolve to eliminate corruption, black money, counterfeit currency and terror funding Drop in economic activity, if any, to be temporary Generate long term benefits including reduced corruption, greater digitisation, increased flow of financial savings and greater formalisation of the economy Pace of remonetisation has picked up and will soon reach comfortable levels The surplus liquidity in the banking system will lower borrowing costs and increase the access to credit Announcements made by the Honourable Prime Minister on 31st Dec,  2016 focusing on housing for the poor; relief to farmers; credit support to MSMEs; encouragement to digital transactions; assistance to pregnant women and senior citizens; and priority to dalits, tribals, backward classes and women under the Mudra Yojana, address key concerns of our economy

TRANSFORMATIONAL REFORMS IN LAST YEAR - Budget 2017 Highlights Passage of the Constitution Amendment Bill for GST and the progress for its introduction Demonetisation of high denomination bank notes Enactment of the Insolvency and Bankruptcy Code; amendment to the RBI Act for inflation targeting; enactment of the Aadhar bill for disbursement  of financial subsidies and benefits Budget 2017-18 contains 3 major reforms. First, presentation of Budget advanced to 1st February to enable the Ministries to operationalise all activities from the commencement of the financial year. Second, merger  of Railways Budget with General Budget to bring Railways to the centre stage of Government’s Fiscal Policy and Third, removal of plan and non- plan classification of expenditure to facilitate a holistic view of allocations for sectors and ministries