Key Highlights from the Indian Union Budget 2018-19

A couple of months ago, the Indian Finance Minister Shri Arun Jaitley presented the general Union Budget 2018-19 in the Parliament with an aim to strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors. The budget comprises of several things, and thus, it is going to take days if we discuss all the announcements in detail. Hence, let’s just focus on the key highlights from the Indian Union Budget 2018-19 which are supposed to help the lower, middle-income class and the business class Indians.

Starting from the bottom – Key Highlights from the Indian Union Budget 2018-19 for Indian Farmers

• MSP for all unannounced Kharif crops will be one and half times of their production cost
  like the majority of rabi crops: Institutional Farm Credit raised to 11 lakh crore in 2018-19
  from 8.5 lakh crore in 2014-15.
• 22,000 rural haats to be developed and upgraded into Gramin Agricultural Markets to
  protect the interests of 86% small and marginal farmers.
• “Operation Greens” launched to address price fluctuations in potato, tomato and onion
  for benefit of farmers and consumers.
• Two New Funds of Rs10,000 crore announced for Fisheries and Animal Husbandry
  sectors; Re-structured National Bamboo Mission gets Rs.1290 crore.

Key Highlights from the Indian Union Budget 2018-19 for Businesses

• The Budget has given a big thrust to Medium, Small and Micro Enterprises (MSMEs) to
  boost employment and economic growth. A sum of Rs. 3794 crore has been provided for giving
  credit support, capital and interest subsidy and for innovations.
• 100 per cent deduction proposed to companies registered as Farmer Producer Companies
  with an annual turnover up to Rs. 100 crore on profit derived from such activities, for five
  years from 2018-19.
• Deduction of 30 per cent on emoluments paid to new employees Under Section 80-JJAA
  to be relaxed to 150 days for the footwear and leather industry, to create more employment.
• Proposal to extend the reduced rate of 25 per cent currently available for companies with
  a turnover of less than 50 crores (in Financial Year 2015-16), to companies reporting
  turnover up to Rs. 250 crore in Financial Year 2016-17, to benefit micro, small and
  medium enterprises

Key Highlights from the Indian Union Budget 2018-19 for the Working Class

• Standard Deduction of Rs. 40,000 in place of present exemption for transport allowance and reimbursement of miscellaneous medical expenses. It is said that 2.5 crore salaried employees and pensioners will benefit from the announcement.
• Arun Jaitley announced that the Government will contribute 12% of the wages of the new employees in the EPF for all the sectors for next three years. He proposed to make amendments in the Employees Provident Fund and Miscellaneous Provisions Act, 1952 to reduce women employees’ contribution to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers’ contribution.

Key Highlights from the Indian Union Budget 2018-19 for Elderlies

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

Taxation related Announcements from the Indian Union Budget 2018-19

• More concessions for International Financial Services Centre (IFSC), to promote trade in
  stock exchanges located in IFSC.
• To control the cash economy, payments exceeding Rs. 10,000 in cash made by trusts and
  institutions to be disallowed and would be subject to tax.
• Tax on Long-Term Capital Gains exceeding Rs. 1 lakh at the rate of 10 per cent, without
  allowing any indexation benefit. However, all gains up to 31st January 2018 will be
  grandfathered.
• Proposal to introduce a tax on distributed income by equity-oriented mutual funds at the
  rate of 10 per cent.
• Proposal to increase cess on personal income tax and corporation tax to 4 per cent from
  present 3 per cent.
• Proposal to roll out E-assessment across the country to almost eliminate person to person
  contact leading to greater efficiency and transparency in direct tax collection.
• Proposed changes in customs duty to promote the creation of more jobs in the country and
  also to incentivise domestic value addition and Make in India in sectors such as food
  processing, electronics, auto components, footwear and furniture.

Social Welfare Announcements from the Indian Union Budget 2018-19

• Loans to Women Self Help Groups will increase to Rs.75,000 crore in 2019 from 42,500
  crore last year.
• Higher targets for Ujjwala, Saubhagya and Swachh Mission to cater to lower and middle
  class in providing free LPG connections, electricity and toilets.
• Outlay on health, education and social protection will be 1.38 lakh crore. Tribal students
  to get Ekalavya Residential School in each tribal block by 2022. Welfare fund for SCs
  gets a boost.
• World‟s largest Health Protection Scheme covering over 10 crores poor and vulnerable
  families launched with a family limit up to 5 lakh rupees for secondary and tertiary
  treatment.

Key Highlights from the Indian Union Budget 2018-19 for Borrowers and Investors

• Tax on Long-Term Capital Gains exceeding Rs. 1 lakh at the rate of 10 per cent, without
  allowing any indexation benefit. However, all gains up to 31st January 2018 will be
  grandfathered.
• Proposal to introduce a tax on distributed income by equity-oriented mutual funds at the
  rate of 10 per cent.
• Proposal to increase cess on personal income tax and corporation tax to 4 per cent from
  present 3 per cent.

Disclaimer:The details presented in the post are directly from the Union Budget 2018-19 PDF shared bu the government.

As per the Government, a series of structural reforms announced in the union budget 2018 will propel India among the fastest growing economies of the world. Country firmly on course to achieve over 8 % growth as manufacturing, services and exports back on good growth path.

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