Union Budget 2018: Health, wealth and happiness with a pinch of salt

Health, wealth and happiness with a pinch of salt.  Finance minister Arun Jaitley, who unveiled the Union Budget 2018-19, the last full Budget of the current government, has focused on the farmer and the rural poor. While allocating Rs 11,000 crore to the agriculture sector for fixing the farmer woes, the government has announced the biggest healthcare scheme, Ayushman Bharat Programme, which will give Rs 5 lakh per family for secondary and tertiary health care. It will cover 10 crore families.

“Without health, India cannot reap the demographic dividend,” Jaitley said.

The government has hiked the education cess by 1% to 4%.

The salaried class despite contributing substantially to the tax kitty did not get any major relief from the Budget. The FM announced a standard deduction of Rs 40,000 per annum from the taxable income, but it includes the current tax-free limits as well.

Alok Agrawal, senior director, Deloitte India, said, “Standard deduction of Rs 40,000 per annum for salaried individuals seems to be a very nominal benefit as the current tax-free limit for medical expense reimbursement of Rs 15,000 per annum and transport allowance exemption of Rs 1,600 per month is anyway leading to a total tax-free salary of Rs 34,200 per annum.”

Excise duty on petrol and diesel has been reduced by Rs 2. Unbranded diesel will attract Rs 4.48 per litre excise duty, branded petrol Rs 5.66 per litre, unbranded diesel Rs 6.33 per litre and branded diesel Rs 8.69 per litre.

In relief to the micro small and medium enterprises (MSME) the corporate tax for companies has been reduced to 25% from 30% for companies having turnover up to Rs 250 crore with an eye on generating employment.

On the railways front, the capital expenditure has been set at Rs 1.48 lakh crore. With safety in mind, track renewal of over 3,600 km to be targeted in 2018-19. The plan has also been announced to have WiFi and CCTV cameras at all stations and on board trains. Mumbai suburban rail network will get Rs 11,000 crore to double rail tracks and have certain elevated corridors. Bengaluru has received Rs 17,000 crore for metro rail network.

Agriculture has been another focus area. With a focus on the elections, the government has announced that minimum support price (MSP) of all kharif crops will be increased to at least 1.5 times that of the production cost. The farmer produce organisations will have a separate tax structure.

“We are talking to the state government to help the farmers to get the best possible price for the crops. The government will set up a institutional mechanism in consultation with the states so that farmers can take advantage of the knowledge of markets and price,” Jaitley said while presenting the Budget.

There is emphasis on generating higher income for the farmers, with a focus on farm, non-farming and cluster based development. Total credit of agriculture has been pegged at Rs 11,000 crore in FY19. Minimum support price (MSP) will be set at 1.5 times of agri production cost. Rs 10,000 crore has been earmarked for fisheries, animal husbandry infrastructure. Also, it has allocated Rs 1,400 crore for food processing, to double the food processing industry. In addition, the government has kept aside Rs 1,290 crore for setting up national bamboo mission.The government will create a Agriculture market fund of Rs 2000 crore 22 000 grameen centres so that farmers can realise the best possible price for its product.

The FM also announced a textile package of Rs 7,148 crore, which will also cover the leather goods sector. The government has introduced a long term capital gains (LTCG) tax of 10% on your earnings of over Rs 1lakh from equities during the year. Short-term capital gains (STCG) tax remains unchanged at 15%.

There is a tax relief on property transactions. There will be no additional capital gains tax payable if the difference between the acutal sale price of a property and its stamp duty value is not more than 5%. Sanjay Sanghvi, partner at Khaitan & Co, said, “This is a great relief for people transacting in properties and will avoid litigation with tax authorities.”

LTCG tax on equity gains exceeding Rs 1 lakh at 10% without indexation will impact equity market and the corpus, which people need to create for meeting their financial and life goals. “This change is, in effect, is a retrospective amendment since only capital gains made till January 31, 2018, will not attract this new tax. This is against the stated policy decision of NDA government not to make retrospective amendment in tax laws,” he said.

Mobile phones and televisions will get expensive as the government hiked the customs duty on mobile phones to 20% from the existing 15%, and TV spare parts from 7.5% to 15%.

“Let us care for those who care for us,” Jaitley said while announcing some sops for senior citizens. The senior citizens will get some tax reliefs on their fixed deposits with the TDS limit being raised from the existing Rs 10,000 to Rs 50,000.

Women have something to cheer about. Salaried women employees need to contribute only 8% to the EPF kitty.

Jatiley said, “Four years ago, we pledged to the people of the nation an honest government,” the Finance Minister began by saying. Jaitley stressed on the structural reform implemented by PM Narendra Modi that has enabled the government to positively transform India from being one of the fragile five.