New Benefits announced for NPS Subscribers in Union Budget 2017-18


New Benefits announced for NPS Subscribers in Union Budget 2017-18
In a bid to provide further impetus to the National Pension System (NPS), the following provisions have been introduced in the Finance Bill 2017 laid down in the Parliament today. 


Tax-exemption to partial withdrawal from National Pension System (NPS)
The existing provision of section 10(12A)of the Income Tax Act, 1961  provides that payment from National Pension System (NPS)  to a subscriber  on closurer of his account or opting out shall be exempt up to 40% of total corpus  at the time of withdrawal . The amount utilized for purchase of annuity is also tax exempt. At the time of normal exit, 40% of the total corpus is mandatorily required to be purchased for annuity. The subscriber has the option to use higher amount for purchase of annuity.
In order to provide further relief to the subscriber of NPS, it has been proposed to insert a new clause (12B) in the section 10 of Income Tax Act, 1961 to provide exemption on partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made there under.
This benefit will be effective on partial withdrawal made by the subscriber after 1st April 2017.
Further, Contribution up to 20% of the Gross Income of the Self-employed individual (Individual other than salaried class) will be deductible from the taxable income under Section 80CCD (1) of the Income Tax Act, 1961, as against 10% earlier.
This is with a view to provide parity between a salaried employee and a self-employed.
This benefit will be available on contribution made by the self employed persons on or after 1st April 2017.
This increased limit for tax benefit will help the self-employed individuals, to save taxes on higher contribution in NPS and thereby properly plan for their old age income security.
Additional tax deduction on investment upto Rs. 50000/- under Section 80CCD (1B) will continue to remain the same for all NPS subscribers whether salaried or self-employed.


India Signs Financing Agreement with World Bank for US$ 201.50 Million for “Third Technical Education Quality Improvement Programme (TEQIP III)”
A Financing Agreement for IDA credit of US$201.50 million (equivalent) for the “Third Technical Education Quality Improvement Programme (TEQIP III)” was signed with the World Bank here yesterday. The Financing Agreement was signed by Mr. Raj Kumar (Joint Secretary, Department of Economic Affairs) on behalf of Government of India and Mr. Junaid Kamal Ahmad, Country Director, World Bank (India) on behalf of the World Bank.

  The objective of the Program is to enhance quality and equity in participating Engineering Education Institutes and improve the efficiency of the Engineering Education System in Uttarakhand, Himachal Pradesh, Bihar, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Rajasthan, 8 North Eastern States and Andaman & Nicobar Islands. The Project has two main components, (i) Improving quality and equity in engineering institutes in those states; and (ii) System-level initiatives to strengthen sector governance and performance. The project has been designed as a disbursement linked one, that is, the World Bank loan will be disbursed on achievement of specific outcomes.

The closing date of TEQIP III is 31st March, 2022.

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 First combined Budget of Independent India, that includes Railways, presented

Total Capital And Development Expenditure of Railways pegged at Rs. 1,31,000 crores


Government to focus on ‘Swachh Rail’; Rs. 1 lakh crores ‘Rashtriya Rail Sanraksha Kosh’ to be created in 5 years


Cashless reservations go up from 58% to 68%


            The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18, in Parliament today, said that this Budget is the First combined Budget of Independent India that includes the Railways. He said that India is now in a position to synergize the investments in railways, roads, waterways and civil aviation. For 2017-18, the total capital and development expenditure on Railways has been pegged at Rs. 1,31,000 crores. This includes Rs. 55,000 crores provided by the Government, the Finance Minister added.



The Finance Minister Shri Jaitley in his Budget Speech said that, the Railways will focus on four major areas, namely, passenger safety, capital and development works, cleanliness and finance and accounting reforms. For passenger safety, a ‘Rashtriya Rail Sanraksha Kosh’ will be created with a corpus of Rs.1 lakh crores over a period of 5 years, to be funded by seed capital from the Government, Railways’ own revenues and other sources. Further, Shri Jaitley informed that the Government will lay down clear cut guidelines and timeline for implementing various safety works to be funded from this ‘Kosh’. Unmanned level crossings on Broad Gauge lines will be eliminated by 2020. Expert international assistance will be harnessed to improve safety preparedness and maintenance practices.



Talking about the proposed steps for modernization and upgradation of identified corridors in his Budget Speech, Shri Jaitley said that Railway lines of 3,500 kms will be commissioned in 2017-18, as against 2,800 kms in 2016-17 and steps will be taken to launch dedicated trains for tourism and pilgrimage. In the next 3 years, the throughput is proposed to be enhanced by 10%. Further, the Minister added that Railways have set-up joint ventures with 9 State Governments and 70 projects have been identified for construction and development.



Regarding station redevelopment, the Finance Minister Shri Jaitley informed that at least 25 stations are expected to be awarded during 2017-18 for redevelopment and 500 stations will be made differently abled friendly by providing lifts and escalators. It is also proposed to feed about 7,000 stations with solar power in the medium term, of which, a beginning has already been made in 300 stations. Works will be taken-up for 2,000 railway stations as part of 1000 MW solar mission, the Minister added.



Emphasizing the Government’s focus on ‘Swachh Rail’, the Finance Minister informed that a series of steps are proposed to be taken to enhance cleanliness in Railways, of which, an SMS based ‘Clean My Coach Service’ has already been started. It is now proposed to introduce the ‘Coach Mitra’ facility, a single window interface to register all coach related complaints and requirements. Further, the Finance Minister Shri Jaitley said that by 2019, all coaches of Indian Railways will be fitted with bio toilets. Pilot plants for environment friendly disposal of solid waste and conversion of biodegradable waste to energy are being set-up at New Delhi and Jaipur Railway Stations and five more such Solid waste management plants are now being taken-up.



The Finance Minister, in his Budget Speech, also gave details about proposed steps to be taken by the Government to help Railways stay competitive vis-a-vis other modes of transportation dominated by the private sector and retain their position of pre-eminence. These include:

(i)     End to end integrated transport solutions for select commodities to be implemented through partnership with logistics players, who would provide both front and back end connectivity. Rolling stocks and practices will be customized to transport perishable goods, especially agricultural products.

(ii)   Competitive ticket booking facility to the public at large. Service charge on e-tickets booked through IRCTC has been withdrawn. Cashless reservations have gone up from 58% to 68%.

(iii) As part of accounting reforms, accrual based financial statements will be rolled-out by March 2019.



During his Budget Speech, the Finance Minister Shri Jaitley re-emphasized on the Government’s continuous endeavour to improve the Operating Ratio of the Railways. He informed that the tariffs of Railways would be fixed, taking into consideration costs, quality of service, social obligations and competition from other forms of transport.



Regarding Metro Rail, the Finance Minister informed that a new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardization and indigenization of hardware and software. This will open-up new job opportunities for our youth.  A new Metro Rail Act will be enacted by rationalizing the existing laws. This will facilitate greater private participation and investment in construction and operation, he added.

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Political Parties cannot receive donation above Rs. 2,000 in cash from one person; entitled to receive donations by cheque or digital mode from their donors;. Have to file its Income-Tax Return within the prescribed time limit

Banks to issue Electoral Bonds to enable donations to Political Parties

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitely while presenting the General Budget 2017-18 in Parliament today said that the political party can receive maximum donation up to Rs. 2,000 in cash from one person. Proposing steps towards transparent funding of political parties, the Finance Minister Shri Jaitley proposed that banks will issue Electoral Bonds to enable donations to political parties.

In his Budget Speech, the Finance Minister Shri Jaitley further said that the political parties will be entitled to receive donations by cheque or digital mode from their donors. Every political party will have to file its Income-Tax Return within the prescribed time limit, he added.

In a significant step to cleanse the system of funding of political parties, Shri Jaitley said that donations to political parties can soon be made by purchasing electoral bonds from authorized banks. The Finance Minister said that the Government will soon frame a Scheme in this regard and an amendment is being proposed to the Reserve Bank of India Act to enable the issuance of electoral bonds. He said that a donor could purchase bonds from authorised banks against cheque and digital payments only. These bonds shall be redeemable in the designated account of a registered political party within the prescribed time limit from issuance of bond, he added.

The Finance Minister said that these steps have been proposed as the political funding for elections couldn’t become transparent though attempts were made to cleanse the system. Despite amendment to the Representation of Peoples’ Act, the Companies Act and the Income Tax Act to incentivise political donations by individuals, partnership firms, HUFs and companies, political parties continue to receive most of their funds through anonymous donations which are shown in cash. He said that the situation has only marginally improved since the provisions were introduced, such as granting exemption from payment of tax to both the donor and the donee, provided a list of donors is maintained, who had contributed more than Rs. 20,000.

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Allocation for welfare of SC, ST and Minorities to be enhanced

Aadhar based smart cards containing health details for senior citizens to be introduced

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the Government is giving special importance to implementation of the Schemes for welfare of Scheduled Castes, Scheduled Tribes and Minorities. The allocation for the welfare of Scheduled Castes has been stepped-up from Rs. 38,833 crores in BE 2016-17 to Rs. 52,393 crores in 2017-18, representing an increase of about 35%. The allocation for Scheduled Tribes has been increased to Rs. 31,920 crores and for Minority Affairs to Rs.4,195 crores. The Government will introduce outcome based monitoring of expenditure in these sectors by the NITI Aayog.

The Finance Minister Shri Jaitley stated that for senior citizens, Aadhar based Smart Cards containing their health details will be introduced. A beginning will be made through a pilot in 15 districts during 2017-18. The LIC will implement a scheme for senior citizens to provide assured pension, with a guaranteed return of 8% per annum for 10 years.

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Mahila Shakti Kendra will be set-up at village level

Allocation for the welfare for Women and Children has been increased from Rs. 1,56,528 Crores to Rs. 1,84,632 Crores

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that Mahila Shakti Kendra will be set-up at village level with an allocation of Rs. 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 nationwide scheme for financial assistance to pregnant women Rs. 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children.

For the welfare of Women and Children under various schemes across all the Ministries the allocation has been stepped-up from Rs.1,56,528 crores in BE 2016-17 to Rs. 1,84,632 crores in 2017-18.

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 Rural, Agriculture and Allied sectors to get about Rupees, One Lakh 87 thousand crore in the Budget 2017-18 , 24 % higher than the previous year

Centre announces Mission Antyodaya to bring 1 crore households and 50 thousand Gram Panchayats out of poverty by 2019

MGNREGA gets the highest ever allocation of Rs 48,000 crore

100% village electrification would be achieved by 1st May 2018

The Finance Minister Shri Jaitley said that the pace of construction of Pradhan Mantri Gram Sadak Yojana, (PMGSY) roads has accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014. He said, that the Government is committed to complete the current target under PMGSY by 2019 and a sum of Rs 19,000 crore has been provided in 2017-18 for this scheme. He said that one crore houses would be completed by 2019 for the houseless and those living in kutcha houses as the Government has stepped up the allocation for Pradhan Mantri Awaas Yojana – Gramin from Rs 15,000 crores in BE 2016-17 to Rs 23,000 crores in 2017-18. Shri Jaitley expressed the hope that 100% village electrification would be achieved by 1st May 2018 and he added that an increased allocation of Rs 4,814 crores has been proposed under the Deendayal Upadhyaya Gram Jyoti Yojana in 2017-18.

The Finance Minister Shri Jaitley said that the Government has proposed to increase the allocations for Deendayal Antyodaya Yojana- National Rural Livelihood Mission for promotion of skill development and livelihood opportunities for people in rural areas to Rs 4,500 crore in 2017-18. The allocation for Prime Minister's Employment Generation Programme (PMEGP) and Credit Support Schemes has been increased more than 3 times. The Finance Minister informed the members that the Swachh Bharat Mission (Gramin) has made tremendous progress in promoting safe sanitation and ending open defecation. Sanitation coverage in rural India has gone up from 42% in October 2014 to about 60% and such villages are now being given priority for piped water supply. He said, for imparting new skills to the people in the rural areas, mason training will be provided to 5 lakh persons by 2022, with an immediate target of training at least 20,000 persons by 2017-18.

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Agriculture to grow more than 4 percent as Government announces a slew of pro-farmer measures in General Budget 2017-18

Farm credit fixed at a record level of Rs 10 lakh crores; Irrigation fund hiked to Rs 40, 000 crores

Finance Minister announced setting-up of a Dairy Processing and Infrastructure Development Fund with a corpus of Rs 8,000 crores to augment farm income

Government says, with a better monsoon, agriculture is expected to grow at 4.1% in the current year i.e.2016-17 as the total area sown under kharif and rabi seasons are higher than the previous year. Presenting his Fourth Budget in Parliament today, the Union Finance Minister Shri Arun Jaitley said that adequate credit would be made available to the farmers in time and the target for agricultural credit in 2017-18 has been fixed at a record level of 10 lakh crores. He said that special efforts would be taken to ensure adequate flow of credit to the under serviced areas, the Eastern States and Jammu & Kashmir. The farmers will also benefit from 60 days’ interest waiver announced by the Prime Minister in respect of their loans from the cooperative credit structure.

The Finance Minister Shri Jaitley said that about 40% of the small and marginal farmers avail credit from the cooperative structure and the Government is committed to support NABARD for computerisation and integration of all 63,000 functional Primary Agriculture Credit Societies (PACS) with the Core Banking System of District Central Cooperative Banks. This will be done in 3 years at an estimated cost of Rs 1,900 crores, with financial participation from the State Governments to ensure seamless flow of credit to small and marginal farmers.

Elaborating on other pro-farmer measures, the Finance Minister said that a Long Term Irrigation Fund has already been set-up in NABARD and the Prime Minister has announced an addition of Rs 20,000 crores to its corpus which will take the fund to Rs 40,000 crores.

The coverage of Fasal Bima Yojana will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. The Finance Minister Shri Jaitley said that the Budget provision of `Rs. 5,500 crores for this Yojana in BE 2016-17 was increased to Rs. 13,240 crores in RE 2016-17 to settle the arrear claims. For 2017-18, a sum of Rs 9,000 crores will be provided and the sum insured under this Yojana has more than doubled from Rs 69,000 crores in Kharif 2015 to Rs 1,41,625 crores in Kharif 2016.

Referring to his last year’s Budget Speech, where the Finance Minister had focused on ‘income security’ of farmers to double their income in 5 years, Shri Jaitley said, that the Government will take more steps and enable the farmers to increase their production and productivity and to deal with post-harvest challenges. The coverage of National Agricultural Market (e-NAM) will be expanded from the current 250 markets to 585 APMCs. Moreover, assistance up to a ceiling of Rs 75 lakhs will be provided to every e-NAM market for establishment of cleaning, grading and packaging facilities.

Admitting that Dairy is an important source of additional income for the farmers, the Finance Minister Shri Jaitley announced that a Dairy Processing and Infrastructure Development Fund would be set-up in NABARD with a corpus of Rs 8,000 crores over 3 years. He said that issuance of Soil Health Cards has gathered momentum, even as the Government has decided to set-up new mini labs in Krishi Vigyan Kendras (KVKs) and ensure 100% coverage of all 648 KVKs in the country.

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Demonetisation will lead to bigger, cleaner and real GDP, says Jaitley

GST to spur growth, competitiveness, and greater transparency in economy

The Union Minister of Finance and Corporate Affairs Shri Arun Jaitley said that India has witnessed historic and impactful economic reforms and policy making in the last one year and there were two tectonic policy initiatives, namely, passage of the Constitution Amendment Bill for GST and the progress made for its implementation ; and demonetisation of high denomination bank notes. Presenting the General Budget 2017-18 in Parliament today, the Finance Minister said, the advantages of GST for the economy in terms of spurring growth, competitiveness, indirect tax simplification and greater transparency have already been extensively discussed in both the Houses of Parliament.

The Finance Minister said that demonetisation seeks to create a new ‘normal’ wherein the GDP would be bigger, cleaner and real .He said that  this exercise is part of the Government’s resolve to eliminate corruption, black money, counterfeit currency and terror funding. The Finance Minister Shri Jaitley  said, that the demonetisation has strong potential to generate long-term benefits in terms of greater digitisation of the economy,increased flow of financial savings and greater formalisation of the economy, all of which would eventually lead to higher GDP growth and tax revenues. It also helps to transfer resources from the tax evaders to the Government, which can use these resources for the welfare of the poor and the deprived at large. There is early evidence of an increased capacity of Banks to lend at reduced interest rates and a huge shift towards digitisation among all sections of society.

The Finance Minister Shri Jaitley underlined that  demonetisation and GST which were built on the third transformational achievement of our Government, namely, the JAM vision, will have an epoch making impact on our economy and the lives of our people. He said that in the last two and half years, it has been the Government's mission to bring a Transformative Shift in the way our country is governed as we have moved from a discretionary administration to a policy and system based administration; from favouritism to transparency and objectivity in decision making; from blanket and loose entitlements to targeted delivery; and from informal economy to formal economy. Finance Minister further said that inflation, which was in double digits, has been controlled; sluggish growth has been replaced by high growth; and a massive war against black money has been launched. He added that the Government will continue to undertake many more measures to ensure that the fruits of growth reach the farmers, the workers, the poor, the youth, the Scheduled Castes and Scheduled Tribes, women and other vulnerable sections of our society.

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Finance Minister announces several anti graft and rationalisation measures in the field of Income tax

Accountants or merchant bankers furnishing incorrect information to face penalty

Income of the Chief Minister’s Relief Fund and the Lieutenant Governor’s Relief Fund to be exempt from tax



Concessional tax rate of 10 per cent in case of income arising from sale of carbon credit



Proposal to provide for grant of interest in case of refund of excess payment of TDS





The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the present burden of taxation is mainly on honest tax payers and salaried employees who are showing their income correctly. He said that the Government is trying to bring within tax-net more people who are evading taxes. In this direction, the Finance Minister has reduced the Income Tax rate from 10 to 5 per cent for small taxpayers. Besides it, the Finance Minister  announced various rationalization measures in the General Budget 2017-18, some of which are listed below-





(i)                 Continuing the Government’s crackdown against the dishonest and the corrupt, the Budget proposed that if an accountant or a merchant banker or a registered valuer, furnishes incorrect information in a report or certificate, he shall be liable to a penalty of Rs 10000 for each such default.



(ii)               To promote green growth, the Finance Minister has proposed to provide a concessional tax rate of 10 per cent in case of income arising from sale of carbon credit.



(iii)             In line with exemption available to the Prime Minister’s Relief Fund, now the income of the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund shall be exempt from tax.



(iv)             To boost the growth of call center industry and increase employment opportunities for the Indian youth, the Finance Minister proposed to lower the rate of deduction of tax in case of payments made to a person engaged only in the business of operation of call centre.



(v)               It is proposed to provide for grant of interest in case of refund of excess payment of TDS. At the same time, to ensure timely filing of returns of income, a fee will be levied in case of delay in filing the return.



(vi)             It is proposed to authorise the Central Board of Direct Taxes (CBDT), to issue

directions or instructions in order to remove hardships faced by the taxpayers in

connection with imposition of penalty relating to tax deduction or collection at

source.



(vii)           The Budget also clarifies that provisions relating to tax deduction at source shall not apply to exempt compensation received under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.



(viii)         In order to strengthen the TCS regime, it is proposed to provide that the collectee

shall furnish his PAN to the collector, failing which, tax shall be collected at a

higher rate.





(ix)             It is proposed to provide that no person shall receive payment or aggregate of payments of an amount of Rs 3 lakh or more from a person in a day, or in respect of a single transaction, or in respect of transactions relating to one event or occasion, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. This restriction shall not apply to Government, banks or certain other categories as notified by the Central Government. Contravention of this provision will invite penalty.



(x)               In order to remove hardship, it is proposed to omit section 197(C) of the Finance Act, 2016 which provided for assessment of undisclosed income relating to any period prior to commencement of the Income Declaration Scheme, 2016. However, in search cases, it is proposed to provide that in case tangible evidence is found during the search, the Assessing Officer can assess income upto ten years preceding the year in which search took place



(xi)             It is proposed to merge the Authority for Advance Ruling (AAR) for Income-Tax with AAR for Customs, Central Excise and Service Tax; and create common AAR.  It is proposed to make the orders passed by the authority under section 10(23C) of the Income-tax Act, appealable before the Tribunal.



(xii)           In order to provide parity between an individual who is an employee and an individual who is self-employed, it is proposed to provide that the self-employed individual shall be eligible for deduction upto 20 per cent of his gross total income in respect of contribution made to National Pension System Trust.



(xiii)         It is proposed to provide tax neutrality in case of conversion of preference shares of a company into equity shares of that company.

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Finance Minister announces several measures for revenue mobilization in the General Budget 2017-18 along with a reduction in tax rates for small tax payers

In a major relief to small taxpayer and to bring more people in the tax net, the Union Finance Minister Shri Arun Jaitly announced a reduction in tax rates from 10 per cent to 5 per cent for individual income between Rs. 2.5 to 5 lakhs. The total amount of tax foregone on account of this measure is expected to be Rs 15,500 crores. So the Finance Minister also announced several revenue mobilization measures in the Budget 2017-18.

While presenting the General Budget 2017-18 in Parliament today , the Union Finance Minister proposed the following measures:

I. Extend the provisions of Section 115BBDA of the Income-tax Act which provides for levy of tax at the rate of 10 per cent on dividend income exceeding Rs 10 lakh, to all resident persons except domestic companies or trust or institution or fund registered under section 12AA or referred to in section 10(23C). Presently, these provisions are applicable only to the individuals, Hindu undivided family (HUF) and firms.

II. Widen the scope of Section 56 of the Income-tax Act to provide that any money, immovable property or specified movable property received without consideration or with inadequate consideration, by any person, subject to certain exemption and exceptions, shall be taxable if its value exceeds Rs 50000.

III. In case of transfer of unquoted equity shares, where the fair market value, determined in the prescribed manner is less than the consideration received, such fair market value shall be the deemed value of consideration for the purpose of computation of capital gains.

IV. Some restrictions have been put on the exemption from long term capital gains in case of transfer of listed shares acquired after 1st October, 2004.

V. Introduction of a new provision in the Income-tax Act to provide for tax deduction at source at the rate of 5 per cent by an individual or HUF, other than those whose books of account are required to be audited, while making payment of rent of an amount exceeding Rs 50,000 per month.

VI. In order to align the transfer pricing provisions with the OECD transfer pricing guidelines and international best practices a new section will be inserted to provide that the assesse shall make secondary adjustment where the primary adjustment to the transfer price has been made in certain cases. The provision shall apply if the primary adjustment exceeds one crore rupees and the excess money attributable to the adjustment is not brought to India within the prescribed time.

VII. In order to address the issue of thin capitalisation, a proposal has been made that the interest paid by an Indian company or permanent establishment of a foreign company, shall not be allowed as deduction in computing its taxable profit subject to certain conditions.

VIII. Provisions have also been made to address the existing anomaly of interest deduction in respect of let-out property vis-à-vis self-occupied property.

IX. The donation by an entity registered under Section 12A or approved under section 10(23C), to other entity, registered under Section 12A, with the direction that such donation shall form part of the corpus, shall not be treated as application of income for charitable purposes.

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Finance Minister reduces the tax rate from 10 to 5 per cent for individual income between Rs 2.5 to Rs 5 lakh.

Finance Minister appeals to all citizens to contribute to Nation Building by making a small payment of 5 per cent tax if their income is falling in this slab.

A simple one- page Income Tax Return form for the category of individuals having taxable income upto Rs 5 lakhs other than business income

The Union Finance Minister Shri Arun Jaitley reduced the rate of taxation from existing 10 per cent to 5 per cent for individual assesses between income of Rs 2.5 lakhs to Rs 5 lakhs. This would reduce the tax liability of all persons below Rs 5 lakh income either to zero (with rebate) or 50 per cent of their existing liability.



While presenting the General Budget 2017-18 in the Parliament today, the Union Finance Minister Shri Jaitley said that the present burden of taxation is mainly on honest tax payers and salaried employees who are showing their income correctly. Therefore, post-demonetisation, there is a legitimate expectation of this class of people to reduce their burden of taxation. The Finance Minister further said that if a nominal rate of taxation is kept for lower slab, many more people will prefer to come within the tax net. The Finance Minister made an appeal to all the citizens of India to contribute to Nation Building by making a small payment of 5 per cent tax if their income is falling in the lowest slab of Rs 2.5 lakhs  to Rs 5 lakhs.





The Union Finance Minister Shri Jaitley said that the Government is trying to bring within tax-net more people who are evading taxes. So, in order to expand tax net, it is decided to have a simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income upto Rs 5 lakhs other than business income. Also, a person of this category who files income tax return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the Department regarding his high value transaction.



In his Budget Speech, the Finance Minister further said that in order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs 2500, available only to assessees upto income of Rs 3.5 lakhs. The combined effect of both these measures will mean that there would be zero tax liability for people getting income upto Rs 3 lakhs per annum. and the tax liability will only be Rs 2,500 for people with income between Rs 3 and Rs 3.5 lakhs. While the taxation liability of people with income upto Rs 5 lakhs is being reduced to half, all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs 12,500 per person. The total amount of tax foregone on account of this measure is Rs 15,500 crore.



In order to make good some of this revenue loss on account of this relief, a surcharge of 10 per cent of tax payable on categories of individuals whose annual taxable income is between Rs 50 lakhs and Rs 1 crore has been proposed. This is likely to give additional revenue of Rs 2,700 crore.



The Finance Minister said that the direct tax proposals for exemptions, etc. would result in revenue loss of Rs 22,700 crore but after counting for revenue gain of Rs 2,700 crore for additional resource mobilisation proposal, the net revenue loss in direct tax would come to Rs 20,000 crore.


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Finance Minister announces Measures for Promoting Affordable Housing and Real Estate Sector

Making the Scheme for profit-linked income tax exemption for promoters of affordable housing scheme announced last year more attractive, the Union Finance Minister Shri Arun Jaitley proposed a number of changes while presenting the General Budget 2016-17 in Lok Sabha today. Shri Jaitley said that instead of counting the built-up area of 30 and 60 sq.mtr., it will be the carpet area of 30 and 60 sq.mtr. of the houses that will be counted under the scheme. He also said that 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. The Finance Minister also proposed to extend the completion period of the building of the houses after commencement under the Scheme from the present 3 years to 5 years.

At present, the houses which are unoccupied after getting completion certificates are subjected to tax on notional rental income. For builders for whom the constructed buildings are stock-in-trade, Shri Jaitley proposed to apply this rule only after the end of the year in which completion certificate is received so as to give the builders some breathing time for liquidating their inventory.

In his Budget Speech, the Finance Minister Shri Jaitley also proposed to reduce the holding period for considering gain from immovable property to be long term from the present 3 years to 2 years and the base year for indexation to be shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable property. The Minister said that this move will significantly reduce the capital gain tax liability while encouraging the mobility of assets. Shri Jaitley added that his Government also plan to extend the basket of financial instruments in which the capital gains can be invested without payment of tax. For Joint Development Agreement signed for development of property, the liability to pay capital gain tax will arise in the year the project is completed.

For the new capital for State of Andhra Pradesh which is being constructed by innovative land-pooling mechanism without use of the Land Acquisition Act, the Union Finance Minister proposed to exempt from capital gains tax all persons who were holding land on 2.6.2014 - the date on which the State of Andhra Pradesh was re-organised - and whose land is being pooled for creation of capital city under the Government Scheme.

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Total allocation for Infrastructure Development stands at Rs. 3,96,135 crores in 2017-18

2,000 kms of roads identified for construction for better connectivity with ports and remote villages

1,55,000 kms of Optical Fiber Cables laid; high speed broadband connectivity to more than 1,50,000 gram panchayats by end of 2017-18

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today informed that the total allocation for infrastructure development in 2017-18 stands at Rs. 3,96,135 crores. In the road sector, the Budget allocation has been stepped up for Highways from Rs. 57,976 crores in BE 2016-17 to Rs. 64,900 crores in 2017-18. Further, 2,000 kms of coastal connectivity roads have been identified for construction and development to facilitate better connectivity with ports and remote villages.



The Finance Minister,Shri Arun Jaitley in his Budget Speech, stated that the total length of roads, including those under Pradhan Mantri Gram Sadak Yojana (PMGSY), built from 2014-15 till the current year is about 1,40,000 kms which is significantly higher than previous three years. Further, Shri Jaitley informed that a specific programme for development of multi-modal logistics parks, together with multi modal transport facilities, will be drawn-up and implemented that will make our economy more competitive.



Speaking on upgradation of Civil Aviation infrastructure, Shri Jaitley said that the Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode. Further, Airport Authority of India Act will be amended to enable effective monetization of land assets. The resources, so raised, will be utilized for airport upgradation. For transportation sector as a whole, including rail, roads, shipping, the Budget provides Rs. 2,41,387 crores in 2017-18. This magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities, the Finance Minister said in his Budget speech.



Calling Telecom sector as an important component of the infrastructure eco-system, Shri Jaitley noted that the recent spectrum auctions have removed spectrum scarcity in the country. This will give a major fillip to mobile broadband and Digital India for the benefit of people living in rural and remote areas. Further, for the BharatNet Project, the allocation has been stepped up to Rs.10,000 crores in 2017-18 and 1,55,000 kms of Optical Fiber Cables have been laid. Shri Jaitley informed that by the end of 2017-18, high speed broadband connectivity on optical fiber will be available in more than 1,50,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology, he added.



For strengthening our Energy sector, the Government has decided to set up Strategic Crude Oil Reserves. In the first phase, 3 such Reserve facilities have been set up and in the second phase, it is proposed to set up caverns at 2 more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan. This will take the country’s strategic reserve capacity to 15.33 MMT. Further, the Finance Minister, in his Budget speech, proposed to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies. In solar energy, the second phase of Solar Park development is proposed to be taken up for additional 20,000 MW capacity, Shri Jaitley added.



The Finance Mini9ster Shri Jaitley further stated that the Government is creating an ecosystem to make India a global hub for electronics manufacturing. Over 250 investment proposals for electronics manufacturing have been received in the last 2 years, totaling to an investment of Rs.1.26 lakh crores. A number of global leaders and mobile manufacturers have set up production facilities in India, hence the Finance Minister said that allocation for incentive schemes like M-SIPS and EDF have been exponentially increased to an all-time high of Rs. 745 crores in 2017-18. Further, a new and restructured Central scheme, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18 to focus on our export infrastructure in a competitive world.

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Shares of Railway PSEs - IRCTC, IRFC and IRCON to be listed

Consolidation, mergers and acquisitions of CPSEs to be encouraged, an integrated public sector ‘oil major’ soon

Pradhan Mantri Mudra Yojana budget target doubled to Rs. 2.44 lakh crores

Rs. 10,000 crores earmarked for recapitalisation of Banks, Need based additional allocation assured

While presenting the General Budget 2017-18 in Lok Sabha here today, the Union Finance Minister Shri Arun Jaitley has said that the shares of Railway Public Sector Enterprises (PSEs) like IRCTC, IRFC and IRCON will be listed in stock exchanges. The Government will encourage strengthening the CPSEs through consolidation, mergers and acquisitions and soon create an integrated public sector ‘oil major’, he added.

Stating that the Pradhan Mantri Mudra Yojana (PMMY) has proved an overwhelming success in extending funds for the deprived sections, Shri Jaitley doubled the budget target under the scheme to Rs. 2.44 lakh crores.

Easing the stressed legacy accounts of banks, Shri Jaitley earmarked Rs. 10,000 crores for recapitalisation of Banks in 2017-18 and assured need based additional allocation.

Stating that the disinvestment policy announced in the last budget will continue, Shri Jaitley further said that the Government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges. This will foster greater public accountability and unlock the true value of these companies, he added.

Shri Jaitley said the CPSEs will be integrated across the value chain of an industry through consolidation, mergers and acquisitions. By these methods it will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders, he added. Possibilities of such restructuring are visible in the oil and gas sector. The Government proposes to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies.

The Finance Minister said that the Exchange Trade Fund (ETF), comprising shares of ten CPSEs, has received overwhelming response in the recent Further Fund Offering (FFO). The Government will continue to use ETF as a vehicle for further disinvestment of shares. Accordingly, a new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18, he added.

Shri Jaitley said that the focus on resolution of stressed legacy accounts of Banks will continue and the legal framework has been strengthened to facilitate resolution, through the enactment of the Insolvency and Bankruptcy Code and the amendments to the SARFAESI and Debt Recovery Tribunal Acts. In line with the ‘Indradhanush’ roadmap, an amount of Rs. 10,000 crore is provided for recapitalisation of Banks in 2017-18 and additional allocation will be provided, as may be required, he added.

Shri Jaitley said that the Pradhan Mantri Mudra Yojana has contributed significantly to funding the unfunded and the underfunded. He further said that the last year target of Rs.1.22 lakh crores was exceeded and for 2017-18, he proposes to double the lending target of 2015-16 and set it at Rs. 2.44 lakh crores. Priority will be given to Dalits, Tribals, Backward Classes, Minorities and Women, he added.

Shri Jaitley said that the Stand Up India scheme was launched by the Government in April 2016 to support Dalit, Tribal and Women entrepreneurs to set up green field enterprises and become job creators. Over 16,000 new enterprises have come up through this scheme in activities, as diverse as food processing, garments, diagnostic centres, etc, he added.

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FIPB to be phased-out in the next fiscal, Bill to be tabled in Parliament soon to crack down on ponzy schemes

High net worth NBFCs can now participate in IPOs at par with Banks and Insurance Companies

Computer Emergency Response Team for Financial Sector to be set up

While presenting the General Budget 2017-18 in Lok Sabha here today, the Union Finance Minister, Shri Arun Jaitley proposed that the Foreign Investment Promotion Board (FIPB) will be phased-out in the next fiscal. Expressing concern over dubious deposit schemes, Shri Jaitley said that a Bill will soon be tabled in Parliament to protect the poor and gullible investors.

Stating that the Government has already undertaken substantive reforms in FDI policy in the last two years and more than 90% of the total FDI inflows are now through the automatic route, Shri Jaitley said that the FIPB has successfully implemented e-filing and online processing of FDI applications and now reached a stage where FIPB can be phased out. Therefore, FIPB will be abolished in 2017-18, he added.

Pointing out that there is an urgent need to protect the poor and gullible investors from dubious deposit schemes, operated by unscrupulous entities, the Finance Minister said that a draft bill to curtail the menace of illicit deposit schemes has been placed in the public domain and will be introduced in parliament shortly after its finalisation. This Act will be amended in consultation with various stakeholders, as part of our ‘Clean India’ agenda, he added.

Dealing with the markets, the Finance Minister proposed that high net worth NBFCs can also now participate in IPOs just like the banks and insurance companies. Shri Jaitley said he proposed to allow systemically important NBFCs regulated by RBI and above a certain net worth, to be categorised as Qualified Institutional Buyers (QIBs) by SEBI at par with the banks and insurance companies, making them eligible for participation in IPOs with specifically earmarked allocations. This will strengthen the IPO market and channelize more investments, he added.

Shri Jaitley said that a common application form for registration, opening of bank and demat accounts, and issue of PAN will be introduced for Foreign Portfolio Investors (FPIs). SEBI, RBI and CBDT will jointly put in place the necessary systems and procedures. This will greatly enhance operational flexibility and ease of access to Indian capital markets. The commodities and securities derivative markets will be further integrated by integrating the participants, brokers, and operational frameworks, he added.

In effort to improve the ease of doing business, the Finance Minister said the process of registration of financial market intermediaries like mutual funds, brokers, portfolio managers, etc. will be made fully online by SEBI. Steps will be taken for linking of individual demat accounts with Aadhar, he added.

To check bank NPAs and enhance capital flows into the securitisation industry, Shri Jaitley said that the listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges.

Stating that in the Financial Sector, the Government’s focus is on building stable and stronger institutions, Shri Jaitley said this thrust will be continued with several new measures as part of the reforms agenda. Shri Jaitley said that the Cyber security is critical for safeguarding the integrity and stability of our financial sector and a Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established. This entity will work in close coordination with all Financial Sector Regulators and other stakeholders, he added.

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Finance Minister unveils string of measures towards Ease of Doing Business

Presumptive income scheme for audit of entities raised from Rs. 1 crore to Rs. 2 crore; Threshold for maintenance of books for individuals and HUF more than doubled

Individual Insurance agents earning below taxable limit to be exempted from 5% TDS off commission after filing self-declaration

While presenting the General Budget 2017-18 in Lok Sabha here today, the Union Finance Minister, Shri Arun Jaitley announced a slew of reliefs in the Government’s continuing policy towards providing an environment of “Ease of Doing Business”.

The Finance Minister Shri Jaitley raised the threshold limit for audit of business entities that opt for presumptive income scheme from Rs. 1 crore to Rs. 2 crore. Similarly, the threshold for the maintenance of books for individuals and HUF is proposed to be increased from turnover of Rs. 10 lakhs to Rs. 25 lakhs or income from Rs. 1.2 lakhs to Rs. 2.5 lakhs.

The Finance Minister Shri Jaitley further said that the Foreign Portfolio Investor (FPI) Category I & II will be exempt from indirect transfer provision under the IT Act. Besides, 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. This will remove apprehensions over taxation upon transfer of stake of investors of India-based funds located abroad but investing in India-based companies, he added.

Bringing relief to individual insurance agents, Shri Jaitley said they will be exempted from the TDS provision of 5% being deducted from commission payable after filing a self-declaration that their income is below taxable limit. Professionals with receipt upto Rs. 50 lakhs p.a. can pay advance tax towards presumptive taxation in one installment instead of four.

In order to allow the people to claim the refund expeditiously, the Finance Minister Shri Jaitley said that the time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return. Also the time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter, he added.

The Finance Minister proposed to restrict the scope of domestic transfer pricing only if one of the entities involved in related party transaction enjoys specified profit-linked deduction. Shri Jaitley said this will reduce the compliance burden for domestic companies since the number of entities being covered under domestic pricing had gone up substantially resulting in longer scrutiny.

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GST Council has finalised its recommendations on almost all the issues based on consensus, says Finance Minister in his Budget Speech

Extensive reach-out efforts to trade & industry for GST to start from 1st April, 2017

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the GST Council has finalised its recommendations on almost all the issues based on consensus after spirited debate and discussions. The Finance Minister said that the Government on its part has promptly given effect to various provisions of the Constitutional Amendment Act, including constitution of the GST Council. The GST Council held 9 meetings to discuss various issues relating to GST, including broad contours of the GST rate structure, threshold exemption and parameters for composition scheme, details for compensation to States due to implementation of GST, examination of draft model GST law, draft IGST law and the Compensation Law and administrative mechanism for GST.  He said the preparation of IT system for GST is also on schedule.

The Finance Minister Shri Jaitley in his Budget Speech further said that 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. He said that since the enactment of the Constitution (One Hundred and First Amendment) Act, 2016, there has been substantial progress on preparatory work towards ushering in GST which is by far the biggest tax reform since Independence. Several teams of officers both from the States and Central Board of Excise and Customs (CBEC)have been working to give finishing touch to the Model GST law, rules and other details, he added.

Shri Jaitley said that the Government, through the Central Board of Excise & Customs (CBEC) shall continue to strive to achieve the goal of implementation of GST as per schedule without compromising the spirit of co-operative federalism. He added that the implementation of GST is likely to bring more taxes both to Central and State Governments because of widening of tax net. The Finance Minister Shri Jaitley stated that not many changes have been proposed in current regime of Excise & Service Tax in the Budget proposals since they are to be replaced by GST soon.

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General Budget 2017-18 proposes Reduction in Customs and Excise for Renewable Energy Sector, and Cashless Transaction Devices

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today announced substantial relief in Customs and Excise Duties for Renewable Energy Sector and for manufacture of Cashless Transaction Devices.

In a bid to incentivize domestic value addition under Make in India initiative of the Government, the Finance Minister has proposed to reduce Customs and Excise duties on several items related to the Renewable Energy Sector. This includes all items of machinery required for - fuel based power generating system to be set up in the country for demonstration purposes; systems operating on biogas/ biomethane/ byproduct Hydrogen; LED lights or fixtures etc.

The Finance Minister has proposed zero Customs and Excise duties on certain items related to cashless transaction devices to promote domestic manufacturing of these products.

Proposals for reduction in Customs duty on inputs and raw materials to reduce costs and for incentivizing domestic value addition under Make in India have been submitted for certain items like Liquefied Natural Gas, Nickel, Vegetable Tanning Extracts and certain Capital Goods.

Proposal to hike Excise duties and to levy additional duties under Sec 85 of the Finance Act, 2005 on several tobacco and tobacco related products have also been made in the Budget.

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Budget gives a major push to Digital Economy; proposes No Cash Transaction above Rs 3 lakh

Government to launch schemes to promote BHIM app, Aadhar Enabled Payment System

Mission to be set-up to achieve a target of 2500 Cr digital transactions in 2017-18

Series of measures proposed to strengthen and regulate digital economy

In a bid to give a push to Digital Economy and weed-out corruption and black money, the Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley in his Budget Speech today said that the Government has decided that no transaction above Rs 3 lakh will be permitted in cash. Accepting a suggestion by Special Investigation Team on Black Money to ban cash transactions above Rs 3 lakhs, the Finance Minister has proposed an amendment to the Income-tax Act in the Finance Bill.

Presenting the General Budget 2017-18 in the Parliament, the Finance Minister said that the Government will launch two new Schemes to promote the usage of BHIM App i.e, Referral Bonus Scheme for individuals and a Cashback Scheme for merchants. BHIM App was launched to promote digital transactions and will unleash the power of mobile phones for digital payments and financial inclusion, The Finance Minister Shri Jaitley informed the House that 125 lakh people have adopted the BHIM app so far.

The Finance Minister Shri Jaitley also announced that Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly. This will be specifically beneficial for those who do not have debit cards, mobile wallets and mobile phones. 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. 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.

Highlighting the Government’s strategy to clean the system through digital economy, Shri Jaitley said that it has a transformative impact in terms of greater formalisation of the economy and mainstreaming of financial savings into the banking system. This, in turn, is expected to energise private investment in the country through lower cost of credit. India is now on the cusp of a massive digital revolution, he added. The Finance Minister said that a shift to digital payments has huge benefits for the common man. The earlier initiative of the Government to promote financial inclusion and the JAM trinity were important precursors to the current push for digital transactions, the Finance Minister added.

In a bid to incentivize the digital transactions, the Finance Minister Shri Jaitley proposed that the presumptive income tax for small and medium tax payers whose turn-over is up to Rs 2 crore will be reduced from the present 8% of their turnover which is counted as presumptive income to 6% in respect of turnover which is received by non-cash means. This benefit will be applicable for transactions undertaken in the current year also, he added.

The Finance Minister also proposed to limit the cash expenditure allowable as deduction, both for revenue as well as capital expenditure, up to Rs 10,000. Similarly, the limit of cash donation which can be received by a Charitable Trust is being reduced from Rs 10,000/- to Rs 2000/-.

To promote cashless transactions, the Finance Minister in the Budget has proposed to exempt BCD, Excise/CV duty and SAD on miniaturised POS card reader for m-POS, micro ATM standards version 1.5.1, Finger Print Readers/Scanners and Iris Scanners. He also proposed to exempt parts and components for manufacture of such devices, so as to encourage domestic manufacturing of these devices.

To strengthen and regulate the digital economy, the Finance Minister has proposed to create a Payments Regulatory Board in the Reserve Bank of India(RBI) by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems.  The Committee on Digital Payments constituted by the Department of Economic Affairs has recommended structural reforms in the payment eco system, including amendments to the Payment and Settlement Systems Act, 2007. The Government will undertake a comprehensive review of this Act and bring about appropriate amendments, Finance Minister added.

To strengthen the digital payment infrastructure and grievance handling mechanisms, the Finance Minister said in his Budget Speech  that the focus would be on rural and semi urban areas through Post Offices, Fair Price Shops and Banking Correspondents. He added that steps would be taken to promote and possibly mandate petrol pumps, fertilizer depots, municipalities, Block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments, including BHIM App. A proposal to mandate all the Government receipts through digital means, beyond a prescribed limit, is under consideration. The Government will strengthen the Financial Inclusion Fund to augment resources for taking up these initiatives, the Finance Minister added.

In his Budget Speech, the Finance Minister informed that increased digital transactions will enable small and micro enterprises to access formal credit. He said that the Government will encourage SIDBI to refinance credit institutions which provide unsecured loans, at reasonable interest rates, to borrowers based on their transaction history.

The Finance Minister assured the House that the Government will consider and work with various stakeholders for early implementation of the interim recommendations of the Committee of Chief Ministers on digital transactions.

Shri Jaitley said that the Government is considering the option of amending the Negotiable Instruments Act to ensure that the payees of dishonoured cheques are able to realise the payments.


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Innovative Fund for Secondary Education to Encourage Local Innovation



The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today proposed  to create innovative fund for secondary education for ensuring universal access, gender parity and quality improvement. Delivering his Budget Speech, the Finance Minister said this will include ICT enabled learning, transformation and the focus will be on 3479 educationally backward blocks.

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A System of measuring Annual Learning Outcome will be Introduced

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today  proposed  to introduce a system of measuring annual learning outcome in our schools. He  said that  emphasis will be given on science education and flexibility in curriculum to promote creativity through local innovative content.

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Legislative reforms to be undertaken to Simplify, Rationalize and Amalgamate the existing Labour Laws

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the Government is keen on fostering a conducive labour environment wherein labour rights are protected and harmonious labour relations lead to higher productivity. Legislative reforms will be undertaken to simplify, rationalize and amalgamate the existing labour laws into 4 Codes on (i) wages; (ii) industrial relations; (iii) social security and welfare; and (iv) safety and working conditions.

  The Finance Minister Shri Jaitley further said that the Model Shops and Establishment Bill 2016 has been circulated to all States for consideration and adoption. This would open-up additional avenues for employment of women. The amendment made to the Payment of Wages Act, is another initiative of our Government for the benefit of the labour and ease of doing  business.

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Action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018 and Measles by 2020

New All India Institutes of Medical Sciences (AIIMS)to be set-up in Jharkhand and Gujarat

Drugs and Cosmetics Rules to be amended to ensure availability of Drugs at Reasonable Prices

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said  that the Government has prepared an action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018 and Measles by 2020. Elimination of tuberculosis by 2025 is also targeted. Similarly, 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 by 2018-2020. 1.5 lakh Health Sub Centres will be transformed into Health and Wellness Centres.

The Finance Minister Shri Jaitley in his Budget Speech said that to strengthen Secondary and Tertiary levels of health care, adequate availability of specialist doctors is needed. We have therefore decided to take steps to create additional 5,000 Post Graduate seats per annum. In addition, steps will be taken to roll-out DNB courses in big District Hospitals; strengthen PG teaching in select ESI and Municipal Corporation Hospitals; and encourage reputed Private Hospitals to start DNB courses. The Central Government will work with the State Governments to take these tasks forward. The Government is committed to take necessary steps for structural transformation of the Regulatory framework of Medical Education and Practice in India.

Two new All India Institutes of Medical Sciences (AIIMS) will be set-up in the States of Jharkhand and Gujarat.

The Budget also proposes to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines. New rules for regulating medical devices will also be formulated. These rules will be internationally harmonised and attract investment into this sector. This will reduce the cost of such devices.

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Affordable Housing will be given Infrastructure Status

National Housing Bank will Refinance Individual Housing Loans of about Rs. 20,000 Crore in 2017-18

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits. The National Housing Bank (NHB) will refinance individual housing loans of about Rs. 20,000 crore in 2017-18. Thanks to the surplus liquidity created by demonetisation, the Banks have already started reducing their lending rates, including those for housing. The Finance Minister Shri Jaitley in his Budget Speech said that in addition, interest subvention for housing loans has also been announced by the Prime Minister.

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Allocation for welfare of women and children increased from Rs 1,56,528 crores in BE 2016-17 to Rs 1,84,632 crores in 2017-18 in General Budget 2017-18

Mahila Shakti Kendra in 14 lakh ICDS Anganwadi Centres

National Housing Bank to refinance individual housing loans of Rs 20,000 crore in 2017-18

For the welfare of Women and Children under various schemes across all Ministries the Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley in his budget speech today said that the allocation has been increased from Rs 1,56,528 crores in BE 2016-17 to Rs 1,84,632 crores in 2017-18.

Shri Jaitley in his speech announced setting up of Mahila Shakti Kendra at village level with an allocation of Rs 500 crores in 14 lakh ICDS Anganwadi Centres. He said that these centres will  provide one stop convergent support services for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition. He also said that under the nationwide scheme for financial assistance to pregnant women announced by Prime Minister on 31st December, 2016,  Rs. 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children.

 In order to facilitate higher investment in affordable housing, the Finance Minister in his budget speech proposed that affordable housing will now be given infrastructure status, which will enable these projects to avail the associated benefits. He added that in addition to the interest subvention for housing loans announced by the Prime Minister and the reduced lending rates by Banks post-demonetisation, the National Housing Bank will refinance individual housing loans of about Rs 20,000 crore in 2017-18.

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 Next Phase of Strive to be Launched at a Cost of Rs. 2200 Crore

Special scheme for creating Employment in Leather and Footwear Industries

Five special Tourism Zones to be set-up in States

Incredible India 2.O campaign to be launched across the world

The Union Minister for Finance and Corporate Affairs Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the Government proposes to launch the next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) in the next financial year 2017-18.at a cost of Rs.2200 crore. The Finance Minister said STRIVE will focus on improving the quality and market relevance of vocational training provided in it is and strengthen the apprenticeship programmes through industry cluster approach

The Finance Minister Shri Arun Jaitley has also proposed that a Special Scheme for creating employment in leather and footwear industries will also be implemented. This will be on the line of already launched a Special Scheme for creating employment in the textile sector.

The Finance Minister Shri Arun Jaitley has also proposed to set-up Five Special Tourism Zone, anchored on SPVs in partnership with the States. The Finance Minister said this is because Tourism is a big employment generator and has a multiplier impact on the economy. The Minister also announced the launching of Incredible India 2.0 campaign across the world.

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Pradhan Mantri Kaushal Kendras to be extended to all over the Country

“SANKALP” for Livelihood Promotion Programme to be Launched at a cost of Rs. 4000 Crores

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the Government proposes to extend the number of Pradhan Mantri Kaushal Kendras from current 60 to cover more than 600 districts across the country. He said 100 India International Skills Centres will be established across the country. These centres would offer advanced training and also courses in foreign languages. This will help those of our youth who seek job opportunities outside the country.

The Finance Minister Shri Arun Jaitley said that in the Financial Year 2017-18, a programme SANKALP (Skill Acquistion and Knowledge Awareness for Livelihood Promotion Programme) will also be launched at a cost of Rs. 4,000 crore. SANKALP will provide market relevant training to 3.5 crore youth.

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National Testing Agency for Entrance Examinations in Higher Education Institutions

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the Government proposes to establish a National Testing Agency as an autonomous and self-sustained premier testing organization to conduct all entrance examinations for higher education institutions. This would free CBSE, AICTE and other premier institutions from these administrative responsibilities so that they can focus more on academics.

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“SWAYAM” Platform will be launched to leverage Information Technology

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that the Government proposes to leverage information technology and launch SWAYAM Platform with at least 350 online courses. In his Budget Speech, the Finance Minister said this will enable students to virtually attend the courses taught by the best faculty; access high quality reading resources, participate in discussion forums; take tests and earn academic grades. Access to SWAYAM would be widened by linkage with DTH channels, dedicated to education.

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Reforms will be undertaken in UGC; Good Quality Institutions would be enabled to have greater Administrative and Academic Autonomy

The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley while presenting the General Budget 2017-18 in Parliament today said that in higher education, the Government will undertake reforms in the UGC. Good quality institutions would be enabled to have greater administrative and academic autonomy. In his Budget Speech, the Finance Minister said that the colleges will be identified based on accreditation and ranking, and given autonomous status. A revised framework will be put in place for outcome based accreditation and credit based programmes.  

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Fiscal deficit for 2017-18 pegged at 3.2% of GDP and to achieve 3% in 2018-19

Total expenditure for 2017-18 has been placed at Rs. 21.47 Lakh Crore

States and the Union Territories with legislatures allocated  Rs. 4.11 Lakh Crore in 2017-18, as against Rs. 3.60 Lakh Crores in be 2016-17



Defence expenditure excluding pensions provided a sum of Rs 2,74,114 Crore including  Rs. 86,488 Crores for Defence Capitalwhile  scientific ministries allocated  Rs. 37,435 Crore in 2017-18.



Greater focus on quality of expenditure and higher tax realisation from huge cash deposits triggered by Demonetization





The Union Minister of Finance and Corporate Affairs while presenting the General Budget 2017-18 in Parliament today said that the total expenditure in Budget for 2017-18 has been placed at Rs. 21.47 lakh crores. With the abolition of Plan-Non Plan classification of expenditure, the focus is now on Revenue and Capital expenditure. Taking  note of the fiscal deficit roadmap for the next three years and considering the need for higher public expenditure in the context of sluggish private sector investment and slow global growth, the Finance Minster Shri Jaitley has  pegged the fiscal deficit for 2017-18 at 3.2% of GDP and further committed to achieve 3% in the following year i.e. 2018-19.



The Union Finance and Corporate Affairs Minister Shri Arun Jaitley further said that he has stepped-up the allocation for Capital expenditure by 25.4% over the previous year with the aim of fiscal consolidation, without compromising the requirements of public investment. Presenting his Fourth Budget for 2017-18 in Parliament today, the Finance Minister Shri Arun Jaitley said that the total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crore in 2017-18, as against Rs. 3.60 lakh crore in BE 2016-17.



Shri Jaitely said, a provision of Rs. 3,000 crore has been made under the Department of Economic Affairs to implement various Budget announcements and other New Schemes in 2017-18. For Defence expenditure excluding pensions, he provided a sum of Rs 2,74,114 crores including  Rs. 86,488 crores for Defence capital.  The Finance Minister increased allocation for Scientific Ministries to Rs. 37,435 crore in 2017-18.



In his Budget Speech , the Finance Minister Shri Arun Jaitley said  he has taken due care to limit the net market borrowing of Government to Rs. 3.48 lakh crores after buyback, much lower than  Rs. 4.25 lakh crores of the previous year. More importantly, the 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 1.9% , against 2% mandated by the FRBM Act. The Government will further improve upon these fiscal numbers, especially the fiscal deficit, in the next year, through greater focus on quality of expenditure and higher tax realisation from the huge cash deposits in Banks, triggered by demonetization, Shri Jaitely concluded.

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In order to make ,MSME companies more viable, income tax for smaller companies with annual turnover upto Rs. 50 Crore is reduced to 25%

Government allows carry forward of minimum alternate tax (mat) upto a period of 15 years instead of 10 years

To give boost to banking sector, allowable provision for non performing asset increased from 7.5 % to 8.5%

The basic customs duty on LNG reduced from 5% to 2.5%.

Presenting the General Budget 2017-18 in Parliament today, the Union Minister for Finance and Corporate Affairs Shri Arun Jaitley said that the income tax for smaller companies with annual turnover upto Rs. 50 crore is reduced to 25% in order to make MSME companies more viable and also to encourage firms to migrate to company format. As per data of Assessment Year 2015-16, there are 6.94 lakh companies filing returns of which 6.67 lakh companies fall in this category and, therefore, percentage-wise 96% of companies will get this benefit of lower taxation. This will make our MSME sector more competitive as compared to large companies. The revenue forgone estimate for this measure is expected to be Rs. 7,200 crore per annum.

The Union Finance and Corporate Affairs Minister Shri Arun Jaitley said it is not practical to remove or reduce MAT at present. However, in order to allow companies to use MAT credit in future years, he proposed to allow carry forward of MAT upto a period of 15 years instead of 10 years at present. Minimum Alternate Tax is at present levied as an advance tax. Although the plan for phasing-out of exemptions will kick in from 1.4.2017, the full benefit of revenue out of phase-out will be available to the Government only after 7 to 10 years when all those who are already availing exemptions at present complete their period of availment.

The Government announced several Measures for Stimulating Growth in the budget proposals for 2017-18. A concessional with-holding rate of 5% is being charged on interest earned by foreign entities in external commercial borrowings or in bonds and Government securities. This concession is available till 30.6.2017. The Finance Minister proposed to extend it to 30.6.2020. This benefit is also extended to Rupee Denominated (Masala) Bonds.

The Government gave income tax exemptions to Start-Ups with certain conditions last year. For the purpose of carry forward of losses in respect of such 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 available to the start-ups for 3 years out of 5 years is being changed to 3 years out of 7 years.

In order to give a boost to banking sector, Shri Arun Jaitely proposed to increase allowable provision for Non-Performing Asset from 7.5% to 8.5%. This will reduce the tax liability of banks. He also proposed to tax interest receivable on actual receipt instead of accrual basis in respect of NPA accounts of all nonscheduled cooperative banks also at par with scheduled banks. This will remove hardship of having to pay tax even when interest income is not realised.

Considering the wide range of use of LNG as fuel as well as feed stock for petro-chemicals sector, the Finance Minister proposed to reduce the basic customs duty on LNG from 5% to 2.5%.

In order to incentivise domestic value addition and to promote Make in India, he proposed to make changes in Customs & Central Excise duties in respect of certain items in his speech. Some of these proposals are also for addressing duty inversion.

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Budget’s thrust on stimulating growth, relief to Middle Class, Affordable Housing, Curbing Black Money, promoting Digital Economy, transparency of Political Funding and simplification of Tax Administration



Government committed to eliminate Black Money component from the economy



MSME companies to pay income tax @ 25%



Custom duty on LNG reduced from 5% to 2.5%



Small and medium tax payers to pay less under presumptive income tax scheme



Measures announced to ensure transparency in Electoral funding



Income tax reduced from 10% to 5% for individual having income in the slab of Rs. 2.5 Lakh to Rs. 5 Lakh



Individuals  in the slab of Rs. 50  Lakh to  Rs.  1 Crore will have to pay surcharge of 10%



GST council’s recommendations on major  issues finalised



            Presenting the General Budget 2017-18 in Parliament here today, the Union Minister of Finance and Corporate Affairs Shri Arun Jaitley said that the major thrust of his Budget proposals is on stimulating growth, relief to middle class, affordable housing, curbing black money, promoting digital economy, transparency of political funding and simplification of tax administration.



            Presenting the overall economic scenario of the country, Shri Jaitley said that we are largely a tax non-compliant society.  Among the 3.7 crore individuals who filed the tax returns in 2015-16, only 24 lakh people show income above Rs. 10 lakh.  Of the 76 lakh individual assesses who declared income above Rs. 5 lakh, 56 lakh are from salaried class.  The number of people showing income more than Rs. 50 lakh in the entire country is only 1.72 lakh, while more than 1.25 crore cars have been sold in the last five years and  over 2 crore people flew abroad in the year 2016.



            Highlighting the priorities of the Government, the Finance Minister Shri Jaitley in his Budget Speech said that one of the main priorities is to eliminate the black money component from the economy.  He said that the Government is committed to make our taxation rates more reasonable, our tax administration more fair and expand the tax base in the country.  Presenting a revealing picture after the demonetization, he said that during the period from 8th November to 30th December, 2016 deposits between Rs. 2 lakh and Rs. 80 lakh were made in about 1.09 crore accounts with an average deposit size of Rs. 5.03 lakh.  Deposits of more than Rs. 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs. 3.31 crore.  This data mining will help the Government immensely in expanding the tax net as well as increasing the revenues, which was one of the main objectives of demonetization.



            For the second year in a row, the growth rate of tax revenue will be 17% as per the RE of 2016-17.  Because of the serious efforts made by the Government, the rate of growth of advance tax in personal income tax in the first three quarters of the Current Financial Year is 34.8%. The tax collections both in Direct and Indirect taxes in the current financial year even after demonetization have shown a remarkable surge.


Mentioning the measures for promoting affordable housing in real estate sector, the Finance Minister said that the scheme for profit linked income tax exemption for promoters of affordable housing will be broad based.  Instead of built-up area of 30 and 60 sq. mtrs., the carpet area of 30 and 60 sq. mtr. will be counted.  Also the 30 sq. mtr. will apply only in case of municipal limits of four metropolitan cities while for the rest of the country limit of 60 sq. mtr. will apply.  In order to be eligible, the scheme was to be completed in three years after commencement.  Now, it will be extended to five years.  The tax on notional rental income will be applicable after one year of the end of the year in which completion certificate is received so that builders get some breathing time for liquidating their inventory.  Announcing changes in the capital gain taxation provisions in respect of land and building, Shri Arun Jaitley said that the holding period for considering gain from immovable property is being reduced to two years from existing three years now.  Also, the base year for indexation is proposed to be shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable property.  In respect of new capital for State of Andhra Pradesh, persons holding land on 2.6.2014 whose land is being pooled for creation of  new capital city under the Government  Scheme,  will be exempted from capital gain tax.



            Delineating measures for stimulating growth, Shri Jaitley said that a concessional withholding rate of 5% being charged on interest earned by foreign entities in external commercial borrowings or in bonds in Government securities is proposed to be extended to 30.6.2020.  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 promoters continues.  Also, the profit linked deduction available to the start ups for three years out of five years is being changed to three years out of seven years.    Shri Arun Jaitley said that it is not practical to remove or reduce Minimum Alternate Tax (MAT).   However, in order to allow companies to use MAT credit in future years, carry forward of  MAT upto a period of 15 years instead of 10 years at present will be allowed.   Announcing tax benefits to medium and small enterprises to make them more viable and to encourage them to migrate to company format, the income tax for smaller companies with annual turnover upto   Rs. 50 crore will be reduced to 25% .  As per data of Assessment Year 2015-16, there are         6.94 lakh companies filing returns of which   6.67 lakh companies fall in this category.  This will make MSME sector more competitive as compared to large companies.  The revenue forgone estimate for this measure is expected to be Rs. 7200 crore per annum.



            To give a boost to Banking Sector, allowable provision for non performing asset is being increased to 8.5% from 7.5%.  This will reduce the tax liability of Banks.  In respect of NPA accounts, interest receivable on actual receipts instead of accrual basis will be taxed.  This will remove hardship of having to pay tax even when interest income is not realized.  Shri Jaitley further announced reduction in basic custom duty on LNG from 5% to 2.5% in view of wide range of use of LNG as fuel as well as feed stock for petro-chemical sector.



In order to incentivize domestic value addition and to promote Make In India, Shri Jaitley announced changes in Customs & Central Excise duties on several items related to the Renewable Energy Sector. This includes all items of machinery required for - fuel based power generating system to be set-up in the country for demonstration purposes; systems operating on biogas/ biomethane/ byproduct Hydrogen; LED lights or fixtures etc.



Proposals for reduction in Customs duty on inputs and raw materials to reduce costs have been submitted for certain items like Liquefied Natural Gas (LNG), Nickel, Vegetable Tanning Extracts and certain Capital Goods.



Proposal to hike Excise duties and to levy additional duties under Sec 85 of the Finance Act, 2005 on several tobacco and tobacco related products have also been made in the Budget.

          

Mentioning measures to promote digital economy/cashless transactions, Shri Arun Jaitley said that BCD, Excise/CV duty and SAD on miniaturized POS card reader for m-POS, micro ATM standards version 1.5.1, Finger Print Readers/Scanners and Iris Scanners will be exempted.  Also, parts and components for manufacture of such devices so as to encourage domestic manufacturing of these devices will be exempted.  No transaction above Rs. 3 lakh will be permitted in cash.  The cash expenditure allowable as deduction, both for revenue as well as capital expenditure will be limited to Rs. 10,000. Similarly, the limit of cash donation which can be received by charitable trust is being reduced to Rs. 2000 from Rs. 10,000.  As regards, scheme of presumptive income tax for small and medium tax payers whose turnover is upto Rs. 2 crore,  6%  of their turnover instead of 8% at present  will be counted as presumptive income. 



            Expressing concern over funds being received by political parties through anonymous donations shown in cash, Shri Jaitley said that the measures taken in the past to check such donations has only marginally improved the situation.  A transparent method of funding political parties which is vital to the system of free and fair elections needs to be evolved.  Shri Jaitley proposed the following  schemes to cleanse the system of funding of political parties:



a)     The maximum amount of cash donation that a political party can receive will be            Rs. 2000/- from one person, b) Political party will be entitled to receive donations by cheque or digital mode from their donors.  c) Reserve Bank of India Act will be amended to enable the issuance of electoral bonds in accordance with a scheme to be framed by the Government in this regard.  Under this Scheme, a donor could purchase bonds from authorized Banks against cheque and digital payments only.  They shall be redeemable only in the designated account of a registered political party.  These bonds will be redeemable within the prescribed time limit from issuance of bond.  d) Every political party would have to file its return within the time prescribed in accordance with the provisions of Income Tax Act.





Mentioning ease of doing business measures, Shri Arun Jaitley said that in order to reduce the compliance burden due to domestic transfer pricing provision, the scope of domestic transfer pricing will be restricted if one of the entity involved in related party transaction enjoys specified profit linked deduction.  The threshold limit for audit of business entities opting for presumptive income scheme is being increased from Rs. 1 crore to Rs. 2 crore.  Similarly, threshold maintenance of books for individuals and HUF is being increased from turnover of Rs. 10 lakh to Rs. 25 lakhs or income from Rs. 1.2 lakh to Rs. 2.5 lakh.



      Shri Jaitley further announced to exempt Foreign Portfolio Investor (FPI) Category I & II from indirect transfer provision.  Indirect transfer provision will not be applicable 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.  He further announced that a TDS of 5%  being deducted from Commission payable to individual insurance agents will be exempted subject to their filing a self declaration that their income is below taxable limit.  Professionals with receipt upto Rs. 50 lakh per annum will be given benefit in terms of paying advance tax in one instalment instead of four under presumptive taxation scheme.  The time period for revising a tax return is being reduced to 12 months from completion of financial year to allow the people to claim the refund  expeditiously.  Also, the time for completion of scrutiny assessment is being compressed further from 21 months to 18 months for assessment year 2018-19 and further to 12 months for assessment year 2019-20 and thereafter.



Giving details of proposals on personal income tax, the Finance Minister said that the existing rate of taxation for individual assesses between income of Rs. 2.5 lakh to Rs. 5 lakh will be reduced to 5% from the present rate of 10%.  This would reduce the tax liability of all persons below Rs. 5 lakh income either to zero (with rebate) or 50% of their existing liability.  In order not to have duplication of benefit, the existing benefit of rebate available to the same group of beneficiaries is being reduced to Rs. 2500 available only to assesses upto income of Rs. 3.5 lakh.  The combined effect of both these measures will mean that there would be zero tax liability for people getting income upto Rs. 3 lakh per annum.  And the tax liability will only be Rs. 2500 for people with income between Rs. 3 and 3.5 lakh.  If the limit of Rs. 1.5 lakh under Section 80C  for investment is used fully the tax would be zero for people with income of Rs. 4.5 lakh.  While the taxation liability of people with income upto Rs. 5 lakhs is being reduced to half, all the other categories of tax payers in the subsequent slabs will also get a uniform benefit of Rs. 12500 per person.  The total amount of tax forgone on account of this measure is Rs. 15500 crore, Shri Jaitley said.



A surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between Rs. 50 lakh and one crore, will be levied.  The existing surcharge of 15% of tax on people earning more than 1 crore will continue.  This is likely to give additional revenue of     Rs. 2700 crore.  A simple one page form to be filed as Income Tax Return will be made for the category of Individual having taxable income upto Rs. 5 lakh other than business income.  Also, a person of this category to file Income Tax Return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the Department regarding his high value transactions.  Shr Jaitley appealed 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 Rs. 2.5 lakh to Rs. 5 lakh.  The Finance Minister further announced that in line with exemption available to the Prime Minister’s Relief Fund and certain other funds, the income of the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund shall be exempted from tax.



Mentioning Goods and Service Tax as a path-breaking reform, Shri Arun Jaitley said that preparatory work for GST is Government’s top priority.  The GST Council has finalized its recommendations on almost all the issues based on consensus.  The 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.  Without compromising the spirit of cooperative federalism, Government shall continue to strive to achieve the goal of implementation of GST.  Shri Jaitley expressed hope that GST will bring more taxes both to Central and State Governments because of widening of tax net.



Making a mention of Prime Minister’s approach of RAPID (Revenue, Accountability, Probity, Information and Digitization), Shri Arun Jaitley said that Government is trying to bring in maximum use of information technology to remove human contact with assesses as well as to plug tax avoidance.  He assured everyone that honest, tax compliant persons would be treated with dignity and courtesy.  The Direct Tax proposals for exemptions would result in revenue loss of  Rs. 22700 crore  while revenue gain through additional resource mobilization proposals would be at Rs. 2700 crore i.e. the  net revenue loss in Direct Tax would come to Rs. 20000 crore.



Concluding his Budget Speech, Shri Arun Jaitley outlined the Government’s overarching agenda: “Transform, Energise and Clean India’.  Government’s emphasis will be on implementing all these proposals for the benefit of the farmers, the poor and the under privileged sections of the society, the Finance Minister added.

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The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley presented the General Budget 2017-18 in Parliament today

Total expenditure in Budget for 2017-18 has been placed at`21.47 lakh crores and this is expected to have multiplier effects and lead to higher growth.

The total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores in 2017-18, as against Rs.3.60 lakh crores in BE 2016-17.

Defence expenditure excluding pensions stands at Rs. 2,74,114 crore

For the first time, a consolidated Outcome Budget, covering all Ministries and Departments, is being laid along with the General Budget

FM: Revenue Deficit for next year is pegged at 1.9%  as against 2% mandated by the FRBM Act.

FM: India seen as an engine of global growth and is expected to be one of the fastest growing major economies in 2017.

Terming demonization a right cause, Finance Minister recalled Mahatma’s quote that  “A right cause never fails”.

FM: Agenda is (TEC)- to transform the quality of governance, energise various sections of society and to clean the country from evils of corruption, black money and non-transparent political funding.

FM:Approach is to spend more in rural areas, on infrastructure and poverty alleviation while maintaining fiscal prudence.

The Government will undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the year marking the 150th birth anniversary of Gandhiji.

Mahila Shakti Kendras to be set up at village level

Budget for the welfare of Women and Children stepped up from Rs. 1,56,528 crores
to Rs 1,84,632 crores in 2017-18.

Allocation for infrastructure development in 2017-18 is Rs.3,96,135 crores.

Railways expenditure will be Rs. 1,31,000 crores, Rs.55,000 crores to be provided by the Government .

Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.


Further liberalisation of FDI policy is under consideration.

Government decided to abolish the Foreign Investment Promotion Board
FIPB in 2017-18.

An integrated Public Sector ‘Oil Major’,
to match the performance of huge international and domestic private sector oil
and gas companies, is proposed.

The shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed
in stock exchanges.

The Finance Minister announced that a new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18.

Rs. 10,000 crores is provided for recapitalization of Banks in 2017-18. The Finance Minister says that an additional allocation will be provided, as may be required.

For  the The Pradhan Mantri Mudra Yojana the lending  target has been set at Rs. 2.44 lakh crores in 2017-18, doubling it from the ones in 2015-16 with priority to be given to Dalits, Tribals, Backward Classes, Minorities and Women.



The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitley presented the General Budget 2017-18 in Parliament here today. This is the first of its kind which included the Railway Budget. This year’s Union Budget also does not have Plan and Non-plan classifications and  has been advanced by a month to the beginning of February. The Finance Minister Shri Jaitley in his Budget speech said that the agenda is “Transform, Energise and Clean India” (TEC)- to transform the quality of governance for better quality of life. The aim is to energise various sections of society, especially the youth and the vulnerable and to clean the country from the evils of corruption, black money and non-transparent political funding. He says, the approach is to spend more in rural areas, on infrastructure and poverty alleviation while maintaining fiscal prudence. Economic reforms will be continued promote higher investments and accelerate growth for the benefit of the poor and the underprivileged.

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Total expenditure in Budget for 2017-18 has been placed at Rs.21.47 lakh crores.  Shri Arun Jaitley said that this is expected to have multiplier effects and lead to higher growth.

The total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores, against Rs.3.60 lakh crores in BE 2016-17.

Defence expenditure excluding pensions, is to be Rs. 2,74,114 crores.

The Finance Minister said that he has taken into consideration the need for higher public expenditure in the context of sluggish private sector investment and slow global growth. He however said that he had kept in mind the recommendation of the FRBM Committee that a sustainable debt should be the underlying basis of prudent fiscal management. He said that considering aspects in the committee report, the fiscal deficit for 2017-18 has been pegged at 3.2% of GDP. The Minister said that he remains committed to achieve 3% in the following year. Shri Jaitley also asserted that the Revenue Deficit for next year is pegged at 1.9% , against 2% mandated by the FRBM Act.


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For the first time, a consolidated Outcome Budget, covering all Ministries and Departments, is being laid along with the Union Budget


Shri Arun Jaitley announced that the target for agricultural credit in 2017-18 has been fixed at a record level of Rs. 10 lakh crores. A dedicated Micro Irrigation Fund with an initial corpus of Rs.5,000 crores with an objective to achieve the goal, ‘per drop more crop’ besides the  Long Term Irrigation Fund with total corpus of this Fund to Rs. 40,000 crores will be set he added.

The Finance Minister said that a model law on contract farming would be prepared and circulated among the States for adoption. He also said that Dairy Processing and Infrastructure Development Fund with a corpus of Rs. 8,000 crores over 3 years would be set up in NABARD. Initially, the Fund is to start with a corpus of Rs.2,000 crores.

Shri Arun Jaitley announced that the Government will now undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the year marking the 150th birth anniversary of Gandhiji. He says the strategy is to utilise the existing resources more effectively along with annual increases and a focused micro plan for sustainable livelihood for every deprived household.

Under the reoriented MGNREGA to support our resolve to double farmers’ income, about 10 lakh farm ponds are expected to be completed by March 2017 against the targeted 5 lakh farm ponds. This will contribute greatly to drought proofing of gram panchayats. The budgetary provision of Rs.38,500 crores under MGNREGA in 2016-17 has been increasedto Rs. 48,000 crores in 2017-18, the highest ever allocation for MGNREGA, the Finance Minster added..

The pace of construction of The Pradhan Mantri Gram Sadak Yojana (PMGSY) has accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014, Shri Arun Jaitley said that the government is committed to complete the current target under PMGSY by 2019. A sum of Rs. 19,000 crores in 2017-18 for this scheme and together with the contribution of States, an amount of Rs. 27,000 crores is to be spent on PMGSY in 2017-18.

An allocation of Rs. 23,000 crores for Pradhan Mantri Awaas Yojana – Gramin from crores is made in 2017-18 against Rs.15,000 in BE 2016-17. Finance Minister said the government proposes to complete 1 crore houses by 2019 for the houseless and those living in kutcha houses. He said the allocation for Prime Minister's Employment Generation Programme (PMEGP) and credit support schemes has been increased more than 3 times.

Shri Arun Jaitley asserted that the total allocation for the rural, agriculture and allied sectors in 2017-18 is Rs.1,87,223 crores, which is 24% higher than the previous year.

In the Sector of education and skill development to benefit you several new measures have been announced in this year’s budget . The Pradhan Mantri Kaushal Kendras (PMKK) have presently promoted in more than 60 districts are proposed to be extended  to more than 600 districts across the country.

A programme called SANKALP  - Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme to provide market relevant training to 3.5 crore youth with a budget of Rs. 4,000 crores has been announced . The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) is also be launched in 2017-18 at a cost of Rs.2,200 crores to focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry cluster approach.

A National Testing Agency is proposed to be established as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions in the country.

Leveraging Information Technology, a platform called SWAYAM is proposed to be launched to teach at least 350 courses by the best faculty online. This will enable students to virtually, attend the courses taught, access high quality reading resources; participate in discussion forums; take tests and earn academic grades.

For higher education reforms in UGC and for secondary education an Innovation Fund to encourage local innovation for ensuring universal access, gender parity and quality improvement with initial focus on 3479 educationally backward blocks are proposed.

For schools flexibility in curriculum to promote creativity through local innovative content with  emphasis on science education and introduction of a system for measuring annual learning outcomes is proposed.

Shri Arun Jaitley announced that Mahila Shakti Kendras will be set-up at village level with an allocation of Rs. 500 crores in 14 lakh ICDS Anganwadi Centres. He said these Kendras  are for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition.

Recalling announcements made by the Prime Minister, the Finance Minister made on 31st December, 2016 as a part of the nationwide scheme Rs. 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and to vaccinate their children. 

Budget for the welfare of Women and Children stepped up from Rs. 1,56,528 crores in BE 2016-17 to Rs 1,84,632 crores in 2017-18.

As a part of strengthening overall health infrastructure in the country the Finance Minister announced setting up of two new All India Institutes of Medical Sciences in the States of Jharkhand and Gujarat. He said the Government is committed to take necessary steps for structural transformation of the Regulatory framework of MedicalEducation and Practice in India which includes several steps for increasing post graduate medical seats.

The allocation for the welfare of Scheduled Castes has been stepped up from Rs.38,833 crores in BE 2016-17 to Rs.52,393 crores in 2017-18, representing an increase of about 35%. The allocation for Scheduled Tribes has been increased to Rs.31,920 crores and for Minority Affairs to Rs.4,195 crores. The Government will introduce outcome based monitoring of expenditure in these sectors by the NITI Aayog ,Shri Arun Jaitley.

The Finance Minister asserted that investments in infrastructure sector are in line with the agenda set for this year budget that is to transform the quality of governance for better quality of life to people, to energise various sections of society to enable them to unleash their true potential; and to clean the country from the evils of corruption, black money and non-transparent political funding.

The Finance Minister said that accordingly a total allocation of Rs.3,96,135 crores is made for infrastructure development in 2017-18, out of which Rs. 2,41,387 crores is for  rail, roads, shipping.

The total capital and development expenditure on Railways for 2017-18 is to be Rs. 1,31,000 crores. Out of this Rs.55,000 crores provided by the Government . Railway lines of 3,500 kms will be commissioned in 2017-18, as against 2,800 kms in 2016-17. A Rashtriya Rail Sanraksha Kosh will be created with a corpus of Rs. 1 lakh crores over a period of 5 years, for passenger safety. Government will lay down clear cut guidelines and timeline for implementing various safety works to be funded from this Kosh.

The Finance Minister said that a new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. He also said that a new Metro Rail Act will be enacted by rationalising  the existing laws to facilitate greater private participation and investment in construction and operation.

For the road sector, a Budgetery allocation of Rs. 64,900 crores is made for 2017-18 for highways against Rs. 57,976 crores in BE 2016-17. He said 2,000 kms of coastal connectivity roads have been identified for construction and development to facilitate better connectivity with ports and remote villages.

Shri Arun Jaitley  said that the Airport Authority of India Act will be amended to enable effective monetisation of land assets. The resources, so raised, will be utilised for airport upgradation.  The Minister said that select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode.

 The Finance Minister said by the end of 2017-18, high speed broadband connectivity on optical fibre will be available in more than 1,50,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. He said accordingly the budget for Bharat Net Project has been stepped up to Rs.10,000 crores in 2017-18. He pointed out that under the BharatNet Project, OFC has already been laid in 1,55,000 kms. The Minister said that a ‘DigiGaon’ initiative will be launched to provide tele-medicine, education and skills through digital technology.

The Minister also talked of strengthening our Energy sector. He said the Government has now decided to take up the second phase of Solar Park development for additional 20,000 MW capacities. Similarly in the second phase the government has decided to set up two more Strategic Crude Oil Reserves one Chandikhole in Odisha and other in Bikaner in Rajasthan besides the three set up earlier.

Shri Arun Jaitley announced that a new and restructured Central scheme, namely, Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.

The Finance Minister has announced that the government has decided to abolish the Foreign Investment Promotion Board (FIPB) in 2017-18.  He said that a roadmap for the same will be announced in the next few months. The minister said that this became possible as The Foreign Investment Promotion Board (FIPB) has successfully implemented e-filing and online processing of FDI applications and more than 90% of the total FDI inflows are now through the automatic route. In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course, the minister added.

Shri Arun Jaitley asserted that a bill will be introduced in the Parliament to curtail the menace of illicit deposit schemes, after the draft bill, placed in the public domain, has been finalized. He said this is part of this budget’s and the Government’s ‘Clean India’ agenda. The Minister said that an amendment Bill to change the Arbitration and Conciliation Act 1996 will be introduced to streamline institutional arrangements for resolution of disputes in infrastructure related  construction contracts, PPP and public utility contracts.

The Minister asserted that the disinvestment policy announced in the last budget will continue and the Government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges.

Shri Arun Jaitley announced that a Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established and it will work in close coordination with all financial sector regulators and other stakeholders.

Other proposals announced by the Minister are:

1.      The commodities and securities derivative markets will be further integrated by integrating the participants, brokers, and operational frameworks.

2.      The process of registration of financial market intermediaries like mutual funds, brokers, portfolio managers, etc. will be made fully online by SEBI to improve ease of doing business.

3.      A common application form for registration, opening of bank and demat accounts, and issue of PAN will be introduced for Foreign Portfolio Investors (FPIs). SEBI, RBI and CBDT will jointly put in place the necessary systems and procedures. This will greatly enhance operational flexibility and ease of access to Indian capital markets.

4.       Steps will be taken for linking of individual demat accounts with Aadhar.

5.       Presently institutions such as banks and insurance companies are categorised as Qualified Institutional Buyers (QIBs) by SEBI. They are eligible for participation in IPOs with specifically earmarked allocations. It is now proposed to allow systemically important NBFCs regulated by RBI and above a certain net worth, to be categorised as QIBs. This will strengthen the IPO market and channelize more investments.

6.       Listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows in to the securitisation industry and will particularly be helpful to deal with bank NPAs.

The Finance Minister announced that the Government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges.

He announced that the shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges.

Shri Arun Jaitley  said that government also proposes to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oiland gas companies. He said the Government sees possibilities of strengthening our CPSEs throughconsolidation, mergers and acquisitions.

Rs. 10,000 crores for recapitalization of Banks in 2017-18 has been allocated. Additional allocation will be provided, as may be required. The Minister said that Listing and trading of Security Receipts issued by a securitization company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows into the securitization industry and will particularly be helpful to deal with bank NPAs.

For  the The Pradhan Mantri Mudra Yojana the lending  target has been set at Rs. 2.44 lakh crores in 2017-18, doubling it from the ones in 2015-16 with priority to be given to Dalits, Tribals, Backward Classes, Minorities and Women.

The Finance Minister announced that a new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18.

Shri Arun Jaitley said that India is now on the cusp of a massive digital revolution. He said that earlier initiative of our Government to promote financial inclusion and the JAM trinity were important precursors to our current push for digital transactions. He hoped the BHIM app has launched would unleash the power of mobile phones. The Minister said that Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly to  specifically benefit those who do not have debit cards, mobile wallets and mobile phones for digital payments and financial inclusion. The minister said that a Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 throughUPI, USSD, Aadhar Pay, IMPS and debit cards. He said there is a proposal to mandate all Government receipts through digital means, beyond a prescribed limit, is under consideration. The minister also pointed out that Necessary amendments are proposed in the Finance Bill 2017  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. Government is also considering the option of amending the Negotiable Instruments Act suitably to ensure that the payees of dishonoured cheques to be
able to realise the payments.

Saying that the Government is committed to improve the standards of public service and transparent governance, the Finance minister announced that the fallowing measures will be take:

Government now proposes to utilise the Head Post Offices as front offices for rendering passport services to people in far flung areas.

A comprehensive web based interactive Pension Disbursement System for Defence Pensioners will be established to receive pension proposals and make payments centrally.

A Centralised Defence Travel System has now been developed through which travel tickets can be booked online by oursoldiers and officers.

Government is considering introduction of legislative changes, or even a new law, to confiscate the assets within our country of such economic offenders who flee the country,, till they submit to the jurisdiction of the appropriate legal forum.

The government proposes to rationalise the number of tribunals and merge tribunals wherever appropriate.

Recalling that Service to the people was the life-long commitment of the Father of the Nation, Mahatma Gandhi, the Minister said that a High Level Committee under the Chairmanship of the Prime Minister is proposed to be set up to take steps to celebrate the 150th Birth Anniversary of the Mahatma,

The total expenditure in Budget for 2017-18 has been placed at`21.47 lakh crores.

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Salient Features of Direct Tax Proposals in Union Budget 2017

The Union Budget 2017 was laid before the Parliament today by the Hon’ble Finance Minister of India. The salient features of Direct Tax proposals are summarised below:



I.          Affordable Housing:



1.         Three concessions in the scheme of Income Tax exemption for affordable housing:

(a)          Area of 30 and 60 Sq.mtr. to be counted as carpet area and not built-up area;

(b)          30 Sq.mtr. only in 4 metropolitan city limits and 60 Sq.mtr. for the rest of the country;

(c)          Completion period extended from 3 years to 5 years.

          

2.         Tax on Notional rental income for builders to be calculated only after 1 year from the end of the year in which completion certificate is received.

          

3.         Changes in Capital Gain taxation for immovable properties:

(a)     Holding period reduce for computation of long term capital gain from three years to two years

(b)     Base year for counting the cost of property shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable property.



4.         Basket of financial instrument in which capital gain can be invested without payment of tax to be expanded.



5.         For joint development agreement, the liability to pay capital gain tax will arise in the year in which project is completed.



            6.         For Andhra Pradesh capital, land belonging to owners as on 2.6.2014 to be exempted from capital gain if the same is offered under land-pooling mechanism.

          

II.        Measures for stimulating growth:



            1.         Concessional withholding rate of 5 per cent. for interest received by foreign entities on loans given in India to be continued for another 3 years beyond 30.6.2017.



            2.         Start-ups to get two relaxations under the scheme of Income Tax holiday given last year.



(a)          The condition of continuous holding of 51 per cent. voting rights to be relaxed as long as the original investment of promoter is not diluted.

(b)          Exemption available for three years out of any 7 years from the date of establishment instead of 3 out of 5 years



            3.         The period of carry forward of MAT/AMT credit increased from 10 years to 15 years.



            4.         The corporate income tax to be reduced from 30% to 25% for companies with turnover upto Rs.50 crore in 2015-16. This will benefit 96% of existing 6.67 lakh companies.  This will result into tax saving of 16.67% for these companies.



            5.         Deduction for provision for NPA of Banks to be increased from to 8.5% instead of 7.5% of profit.  

            6.         In case of NPA of non-scheduled cooperative banks, interest to be recognised as income only when received.



III       Promoting Digital Economy:



1.         In the presumptive income tax for small traders, income to be taken as 6% of turnover which is received by digital or banking means.



2.         Cash expenditure allowable to be reduced to Rs.10,000 from the existing Rs.20,000.



3.         Cash transaction of above Rs.3 lakh not to be permitted. The penalty of equal amount to be levied in case of breach.



            IV        Transparency in Electoral Funding:

          

1.         The cash donation to political parties from one person limited to Rs.2,000/-.

          

2.         Electoral Bond to be introduced for facilitating donation to political parties from explained sources.



            3.         Political parties to file their return in time limit prescribed in the Income Tax Act.



            V.        Ease of Doing Business:



1.         Domestic transfer pricing to be applied only if one of the two companies enjoys specified profit-linked deduction.



2.         The audit limit for business entities opting for presumptive scheme to be increased from Rs.1 crore to Rs.2 crore.



3.         Individuals and HUFs not required to keep books of accounts if their turnover is up to Rs.25 lakhs or income is upto Rs.2.5 lakhs.



            4.         Investment in Category 1 and 2 foreign portfolio investors registered with SEBI to be exempted from provisions of indirect transfer.



            5.         TDS of 5% not to be deducted for individual insurance agents if they certify their income to be below taxable limit.



            6.         Professionals in presumptive scheme to pay advance tax only in one instalment in March instead of four.



            7.         The time limit for revising a tax return reduced to 12 months. Also time limit for completion of scrutiny will be brought down to 12 months from Assessment Year 2019-20 onwards.



            VI        Personal Income Tax:



            1.         Personal income tax for people with income in the slab of 2.5 lakh to 5 lakh to be reduced to 5% instead of 10%. This will reduce their tax liability to half while all other tax payers above this slab will also be benefited in terms of lesser tax of Rs.12,500 per individual (revenue loss ofRs.15,500 crores).

          

2.         Surcharge of 10% to be levied on individuals with income between Rs.50 lakhs to Rs.1 crore (revenue gain of Rs.2,700 crore).



VII.     Miscellaneous:



1.         TCS exemption for state transport corporation in respect of purchase of vehicles.



2.         Income of Chief Minister’s relief fund exempt from tax.



3.         Penalty on accountant, registered valuer and merchant banker for furnishing incorrect information.



4.         In order to ensure timely filing of return and expeditious issue of refund, a fee shall be levied for delay in filing of return.

 

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