Budget 2018 LIVE Updates: Capital Gains Tax
BUDGET 2018 LIVE UPDATES: Prime Minister Narendra Modi has hailed his government’s last pre-poll budget as a “big step” towards achieving Ease of Business and Ease of Living. Farmers, rural India and healthcare were the main focus of Budget 2018 — the last pre-poll budget — presented by Finance Minister Arun Jaitley earlier today, but the middle class hopes for Income Tax relief were dashed. While the farmers were assured an MSP 1.5 times the cost of production, the poorest of the poor will be covered by universal healthcare to the tune of Rs 5 lakh per year. As consolation prize, the middle class got Rs 40,000 standard deduction against travel and medical expenses. The Budget also gave a boost to Make in India by increasing custom duty on mobile phones, which means handsets made by foreign companies will cost more. In the Budget speech, Jaitley vowed to keep fiscal deficit at 3.3%. Jaitley also announced hike in President’s salary to Rs 5 lakh a month, the Vice-President’s salary will rise to Rs 4 lakh per month and the Governor’s pay will rise to Rs 3.5 lakh a month. Jaitley announced a Rs 150 crore fund to celebrate the 150th anniversary of Mahatma Gandhi. As per Budget 2018, Bengaluru Metro will get Rs 17,000 crore and Rs 11,000 crore will be allocated to Mumbai rail network. Breaking with tradition, Jaitley delivered the speech both in Hindi and English.
The FM is asked if he presented the budget in Hindi to reach out to the rural population, what about the population in non-Hindi speaking states. The FM counters by saying that his speech was in English and Hindi to reach the maximum number of people. On a lighter note, he adds that translations of his speech are available in all official languages.
The discussion veers towards GST, particularly evasion and profiteering. Citing the case of HUL, Jaitley says that the FMCG major voluntarily came forward and deposited the extra revenue generated as it did not pass the benefit in GST cut to consumers. The restaurants, too, he says did not increase, prices after GST was cut to 5 percent. The government has also established an anti-profiteering authority as a deterrent, he says.
On reduction in Swachch Bharat fund, the FM says that it has been adopted by CSR of many corporates and the results show very clearly that it has been successful. He says that earlier, toilet coverage was 36 per cent but that has increased to more than 70 percent now. Many more districts have also become defecation free, he says.
This budget has been classified anti-middle class, but Jaitley says any expenditure on healthcare, education and infrastructure benefits the middle class. Previously, too, the government had increased the exemption limit and those in the Rs 5-7 lakh income category can get away with very little tax.
Jaitley says that the impression that only a few pay tax needs to be corrected. There are around 25 crore families. Out of this, there are farmers who are tax exempt, then there are those of BPL category and there are those who are below the tax net. With expansion of TDS, last year 8.25 crore people filed returns. So the target of 10 crore taxpayers is not impossible anymore, says the FM.
The FM says improved infrastructure in Railways will take some time but results will come, but the infra push is already showing results in airports and roads. At the end, it will also benefit the middle class as it improves the economy and creates jobs.
The FM clarifies that MSP will not only be for the Kharif crop. It is a principle that is here to stay. Funds have already been sanctioned to procure crops like potatoes for cold storage, says Jaitley.
Jaitley, on fiscal math, says that it would largely depend on oil prices. If they stay in the current range, the revenue won’t be affected. But if they go through the roof, there could be some trouble.
On taxation of capital gains, Jaitley says the proposal was pending for several years. More than Rs 3 lakh crore was the tax exemption on capital gains in the last financial year, says Jaitley. Most of this was large investors. So, we took a conscious decision to generate revenue for social security schemes. This was a subsidy for the richest. Capital gains tax can alone foot the bill for…Read More
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