Investment Scheme
|
Employee’s Contribution
|
Employer’s Contribution
|
Lock-in period
|
Taxability at the stage of
withdrawal
|
ELSS
|
Deduction under section 80C
within the cap of INR 150,000 per year
|
Not applicable
|
3 years
|
1) Long term gains subject to
Securities Transaction Tax (‘STT’) – Exempt; 2) Long term gains not subject
to STT – Taxable at 20% (plus applicable Surcharge and Education Cess)
|
Public Provident Fund
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15 years
|
Exempt
|
||
Life Insurance Premium
|
Depends on the tenure of
policy
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Exempt subject to the
provisions of section 10(10D)
|
||
NSC
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NSC up to VIII Issue – 5
years. NSC IX Issue – 10 years
|
Interest is taxable
|
||
Tax saving fixed deposits
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5 years
|
Interest is taxable
|
||
Recognised Provident Fund
(RPF)
|
Exempt under section 10(12)
up to contribution of 12% of salary
|
58 years / early withdrawal
(subject to conditions specified)
|
Exempt under following
circumstances:
1)
Completion of 5 years of continuous service;
2) Employee’s ill health or by contraction or discontinuance of the employer’s business or other cause beyond the control of the employee; 3) Transfer of accumulated balance to the new RPF at the time of change of employment; 4) Transfer of entire accumulated balance to NPS |
|
National Pension Scheme (NPS)
|
Deduction under section
80CCD(1B) up to INR 50,000 ; in addition to INR 150,000 under section 80C
|
Deduction up to 10% of the
salary under section 80CCD(2)
|
60 years / partial withdrawal
option available (subject to conditions specified)
|
At the time of
withdrawal upon retirement:
* 60% of accumulated balance can be withdrawn and 40% to be invested in purchase of annuity; * 40% of accumulated balance is exempt and 20% is taxable.Withdrawal before retirement: * 20% of accumulated balance can be withdrawn, which is fully exempt; * 80% of accumulated balance to be invested in purchase of annuity. |
Approved Superannuation
|
Deduction under section 80C
within the cap of INR 150,000 per year
|
Taxable as a perquisite if
the same is in excess of INR 100,000 per year under section 17(2)(vii)
Maximum contribution including Provident Fund cannot exceed 27% of salary as
per Rule 87
|
Retirement: Exemption subject
to the provisions of section 10(13) Resignation: Fully Taxable
|
Saturday, February 3, 2018
Investment Schemes: How They Have Been Modified Under Budget 2018?
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At present, deduction of a maximum Rs 1.5 lakh is allowed to all individual taxpayers for investing in various tax saving schemes, such as EPF, PPF (Public Provident Fund), life insurance schemes, National Savings Certificates (NSC), ELSS, tax savings fixed deposits, recognised Provident fund, National pension scheme and Approved superannuation under section 80C . An increase in this limit will allow individuals to save more and channelize long-term savings into capital markets. Section 80C could see an increase in its limit by Rs 50,000, perhaps even higher, in Budget 2018.
Samyak Jain
17BAL050
In the present financial year Investments of up to Rs 1.5 lakh can earn a tax break under Section 80C of income tax act 1961 which helpful for the investor to investing in the various tax saving scheme.
Equity Linked Savings Scheme(ELSS) i think is the best scheme to invest because it has lowest lock-in among all the tax saving.Investments of up to Rs 1.5 lakh in ELSS funds can earn a tax break under Section 80C. The advantage of ELSS funds is that they come with the lowest lock-in among all tax-saving investments–just 3 years.
MOHIT PALIWAL
17BAL090
In the most awaited budget financial minister Mr.Arun Jaitley has given tax exemption in various investment schemes.One of them is life insurance policy.Public provident fund has also been given tax exemption on withdrawal for lock in period of 15 years.Also tax limit of national pension scheme has increased from 40% to 60% which is good move to lure senior citizens for the upcoming Loksabha elections.
PRATIKSHA SENGAR
17BAL040
Finance Minister Arun Jaitley in his Budget 2018 speech has proposed to exempt 40 percent of the total amount payable to the National Pension System (NPS) subscriber on closure of his account or on his opting out in case of non-employee subscribers. The tax benefit for non-salaried individuals will now be at par with salaried individuals.
Under the existing provisions of clause (12A) of section 10 of the Act, an employee contributing to the NPS is allowed an exemption in respect of 40 percent of the total amount payable to him on closure of his account or on his opting out. This exemption is not available to non-employee subscribers. In order to provide a level playing field, it is proposed to amend clause (12A) of section 10 of the Act to extend the said benefit to all subscribers. This amendment will take effect, from April 1, 2019, and will accordingly apply in relation to the assessment year 2019-20 and subsequent assessment years.
Up to 60 percent of the maturity corpus can be withdrawn as a lump sum on maturity at age 60, but if the subscriber exits from NPS before he turns 60, then only up to 20 percent of the corpus can be withdrawn.
Ujjawal Bhargava
17BAL116
The Union Budget 2018 was excepted to be a mix bag of announcements for many tax payers.
1) No changes in the structure of tax slabs for salaried tax payers.
2) There is a standard deduction of Rs 40,000 is proposed for salaried employees. This move was brought about keeping in mind that salaried individuals have been paying more tax than individual business owners. This standard deduction in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses. However, one needs to keep in mind that, the transport allowance at enhanced rate shall continue to for differently-abled. And, other medical reimbursement benefits in case of hospitalisation etc, which are currently applicable to employees shall also continue. This standard deduction move will reduce the tax liability for middle class employees as well as pensioners.
3) For senior citizens, there will be raise in exemption in of interest income on deposits with banks and post offices to be increased from Rs 10,000 to Rs 50,000. And the best part is that TDS will not be deducted for the same. This move is applicable to all fixed deposits schemes and recurring deposit schemes. As far as health insurance premiums go, deduction for the same has been raised Rs 30,000 to Rs 50,000 under section 80D. For critical illness, the deduction for medical expenditure in respect of 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 in respect of all senior citizens, under section 80DDB.
4) Finance Minister rationalised Long Term Capital Gains (LTCG) tax. FM for equities proposed to tax long term capital gains exceeding Rs 1 lakh at the rate of 10 percent without allowing the benefit of any indexation. However, all gains up to 31st January, 2018 will be grandfathered. A tax on distributed income by equity oriented mutual fund at the rate of 10 percent was introduced as well.
17bal084
Harshita Khare
The ideas for union budget 2018 to make common man's personal finance less taxing-
1)Increase duration for education loan deduction.
2)Raise limit for tax deduction for NPS contribution by self employed.
3)Abolition dividend distribution tax.
4)Bring back standard deduction for salaried class.
5)Retain long term capital gain tax benefit on equities.
6) Facilitate donation and gifting of investment.
7)Reduce GST on insurance product from 18-5%.
8)Reduce LTCG holding period for REITs.
9)Hike tax-free limit for medical allowance.
10)Make home insurance mandatory and offer tax deduction on premium.
11)Introduce individual retirement account.
12)Include low-risk hybrid funds under Section 80C.
13)Reduce holding period for LTCG from debt funds.
14)Change tax rules for vesting date of stock options.
15)Make tax return filing automatic for individuals.
16)Tax developers for unsold inventory to bring down real estate prices.
17)Reduce import duty on gold to align with GST.
18)Make holding period uniform for all tax savings products.
19)Make pension plans tax friendly.
20)Separate tax deduction for pure term plans.
21)Cut GST rate for property from 12% to 5%.
22)Offer tax relief to senior citizens.
23)Let NRIs claim deduction for treatment of relatives.
24)Let Aadhaar linkage act as centralised KYC.
25)Up to 60% of the NPS corpus should be made tax free.
Samar Pratap (17bal105)
Union Finance minister Arun Jaitley presented Union Budget 2018 in Parliament. It was his last full budget of Narendra Modi Government before 2019 Lok Sabha elections.He introduced the some majma changes as :-
Economy firmly on course to achieve high growth of 8%.
GDP growth at 6.3% in second quarter of 2017-18.
Growth in second half likely to remain between 7.2% to 7.5% .where as Central Government’s Debt to GDP ratio to be brought down at 40%.
Where as in Taxation Corporate/Personal/Customs Duty
Growth of direct taxes in 2016-17 at 12.6% & for the financial year 2017-18 (up to 1 January 2018) at 18.7%.
Additional revenue collected from personal income tax is Rs. 90,000 crore.
No change in personal Income-Tax slabs. Number of Effective Tax Payers increased to 8.27 crore
Standard Deduction of Rs. 40,000 in place of the present exemption allowed for transport allowance and reimbursement of miscellaneous medical expenses
Increase in education and health cess on personal income tax and corporation tax to 4 %
Corporate Tax: Reduced to 25 % and will be extended to companies with turnover up to Rs. 250 crore
100% deduction to companies registered as Farmer Producer Companies with annual turnover up to Rs. 100 crore
Real estate sector: No adjustment to be made for transactions in immovable property where Circle Rate value does not exceed 5% of the consideration
More concessions for International Financial Services Centre (IFSC) to promote trade
Alternate Minimum Tax (AMT) at concessional rate of 9 percent at par with Minimum Alternate Tax (MAT) applicable for corporates
Payments exceeding Rs. 10,000 in cash made by trusts and institutions to be disallowed
Long-Term Capital Gains (LTCG) rationalised at the rate of 10% for Rs. 1 lakh. It will be without allowing any indexation benefit. However, all gains up to 31 January 2018 to be grandfathered.
To introduce a tax on distributed income by equity-oriented mutual funds at the rate of 10%
Customs Duty on mobile phones increased to 20% and also on televisions increased to 15 %
Exemption of interest income on deposits with banks and post offices are proposed increased to Rs. 50,000 from Rs. 10,000.
TDS shall not be required to be deducted under section 194A. Benefit will also be available for interest from all fixed deposit schemes and recurring deposit schemes.
Hike in deduction limit for health insurance premium and medical expenditure to Rs. 50,000 from Rs. 30,000 under section 80D. Deduction limit for medical expenditure increased to Rs. 1 lakh under section 80DDB.
17BAL073
ANIKET RATHORE
Equity Linked Savings Scheme(ELSS), I think is the best scheme to invest because it has lowest lock-in period among all the tax saving. The Budget 2018 offered to increase the investment limit under Pradhan Mantri Vaya Vandana Yojana to Rs 15 lakh from the extent limit of Rs 7.5 lakh. The exemption for senior citizens on account of health insurance premium is raised to Rs 50000 from extant Rs 30000 under section 80D. The Finance Minister Arun Jaitley also proposed to increase the limit of deduction for medical expenditure in respect of certain critical illness from Rs 60000 in case of senior citizens and from Rs 80000 in case of very senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB. In this budget, the Finance Minister Arun Jaitley made it clear that these concessions will give extra tax benefit of Rs 4,000 crore to senior citizens.
Though the tax slabs are not revised, the introduction of the standard deduction for all individual taxpayers to the extent of Rs 40000 should also help the senior citizens with less tax liability. This should work better for senior citizens for the upcoming Loksabha elections.
Yash Jain
17BAL121
Along with modifications in investment schemes there has been changes in banking sector as well, in budget 2018.
These are the following modifications in the banking sector: -
Allow full tax deduction for provisioning of non-performing assets at lenders.
Reduce the tenure of tax-exempted retail term deposits to minimum of 3 years from current 5.
Allow tax relief for proceedings under insolvency code.
NBFCs must be treated at a par with banks for tax provisions.
Provide blanket TDS exemption for payments to banks.
Abolish MAT for units in IFSCs.
Give details of the government's proposed Rs.2.11 lakh crs bank recapitalization plan.
Yagya Sharma
17bal059
In the Union Budget 2018 presented on February 1, Finance Minister Arun Jaitley has made some senior citizen-friendly announcements to reduce the tax outgo and encourage savings.
Buy More Fixed Income Instruments
Buy Bigger Health Insurance Coverage
Invest In Pradhan Mantri Vaya Vandana Yojana
Buy Short Term Debt Mutual Funds & Balanced Mutual Funds
In this budget speech the Finance Minister Arun Jaitley made it clear that these concessions will give extra tax benefit of Rs 4,000 crore to senior citizens.
Similarly various other measures have also been taken.The interest earned up to Rs 50000 from deposits with banks and post offices will be exempted instead of Rs 10,000 now. This will ensure that the TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
The Finance Minister Arun Jaitley also proposed to increase the limit of deduction for medical expenditure in respect of certain critical illness from Rs 60000 in case of senior citizens and from Rs 80000 in case of very senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB.
17bal051
Shubhsmita
The key highlights of the UNION BUDGET of 2018 presented by Union Finance Minister, Mr. Arun Jaitley are as follows:
1) For senior citizens, exemption of interest income on bank deposits raised to Rs 50,000.
2) Govt to reduce hardships faced in realty deals; no adjustment to be made in case circle rate does not exceed 5 pc of sale consideration.
3) Cash payments exceeding Rs 10,000 by trusts and institutions will be disallowed in a bid to curb cash economy.
4) Strong case for long term capital gains from equities; 10 pc tax on long term capital gains in excess of Rs 1 lakh.
5) Education cess increased to 4 pc from 3 pc to collect additional Rs 11,000 cr.
6) Import duty on fruit juice raised from 30 pc to 50 pc.
7) Agri-Market Development Fund with a corpus of 2000 crore to be set up for developing agricultural markets.
8) Under Swachh Bharat Mission, Centre plans to construct 2 crore more toilets.
9) Rs 16,000 cr to be spent on providing electricity connection to 4 cr poor households.
10) Allocation of Rs. 56,619 crore for SC welfare and Rs. 39,135 crore for ST welfare announced.
11) Indian Railways allocation in next fiscal now proposed at over Rs 1.48 lakh crore. 36,000-km of rail track renewal targeted in coming year.
It’s a transformational budget, and it will bring about a positive change in everyone’s lives. It’s a budget for the common man, the farmers and for the nation.
VARTIKA JAIN
17BAL125
Everyone is commenting the highlights of the budget just for the sake of commenting something or the other, none has anything to comment about the standing of the budget,how voter centered it is and how polarizing modi government's schemes are ,when it comes to politics. Pretty weird students only consider this activity for accumulation of marks but not at all for positive contribution and that is something to worry about
Finance Minister Arun Jaitley on Thursday proposed a 10% Dividend Distribution tax (DDT) on dividend options of equity funds to bring them on par with the growth schemes.
"I also propose to introduce a tax on distributed income by equity oriented mutual fund at the rate of 10%. This will provide level playing field across 30 growth oriented funds and dividend distributing funds, FM Jaitley said in his Budget speech.
The move is likely to hit investor sentiment as domestic mutual funds had pumped in a staggering over Rs 1 lakh crore in the stock market last year, much higher than over Rs 48,000 crore infused in 2016 and more than Rs 70,000 crore in during 2015. In fact, the investment by mutual funds in equities has outshone those by foreign portfolio investors (FPIs) in past few years.
"Sentiments may get impacted as mutual funds have been gaining traction among investors as route to invest in stock markets," HDFC AMC Chairman Deepak Parkeh said.
The 10 percent tax on mutual fund dividends is in addition to the Securities Transaction Tax (STT) on transaction in shares, bonds, debentures, derivatives units, interest in securities and equity mutual funds. For delivery-based equity transactions, STT for purchase and sale is 0.1% of turnover. For intra-day transactions, STT for purchase is nil and sale is 0.025% of the turnover.
Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Adviser India said, "Introduction of a 10% Dividend Distribution tax (DDT) on dividend options of equity funds to bring them on par with the growth schemes. This move may impact flows into funds where investors were primarily entering with the expectation of regular dividends. In, fact dividend schemes are now slightly disadvantaged as opposed to growth schemes as LTCG below 1 lakh is exempt from tax."
Mihir Abhay Bedekar
17BAL089
Under section 80(c) of the Income Tax Act,1961 up to rs. 1.5 lac of tax exemption for individuals investing in various tax paying scheme like PPF (Public Provident Fund), NSC (National Service Scheme), Equity Linked Savings Scheme(ELSS), etc.Of these in my opinion the best one is ELSS because it gives you highest interest rate.Further,ELSS is specially created to give taxpayers the dual benfit of saving taxes under Sec 80C with the lowest lock-in period.The other change in Budget 2018 are-
1) Section 80D deduction limit for health insurance premium and/ or medical expenditure
increased from Rs 30,000/- to Rs 50,000/- for senior citizens
2) Section 80DDB deduction limit for medical expenditure critical illness from:
Rs 60,000/- in case of senior citizens
Rs 80,000/- in case of very senior citizens,
to Rs 1 lakh in respect of all senior citizens
3) Deduction under Section 80TTB introduced for senior citizens who can claim exemption of interest from banks, post office, etc upto Rs 50,000.
Syed Fahad Saeed
17bal113
ELLS Investments amounting to 1.5 lakhs will receive a tax break which will encourage small investors to invest and save their tax simultaneously.
The pension scheme has had its limit increased from 40 to 60% which is an effort to have more senior citizens in the investment bracket and also an effort to get votes.
Recognised Provident Fund to has been given a tax exemption provided the employee invests 12% of their earnings.
The government seems keen to have more money in the system which is evident from the fact that India's fiscal deficit might rise to 3.5% in FY 19.
Also, this seems to be a measure to recover the capital lost in the bank bailouts by the govt previous fiscal year.
Overall, it's a populist budget at the expense of traders in the stock markets where a 10% Long-term capital gains have been imposed. A country like India has a lot of money stacked up in savings accounts and FDs and the government wants some of that chunk for itself at rates a lot lower than the stock markets and a bit higher than the alternatives to catch hold of the unaware middle class who think that they've invested in the best scheme.
Devashish Saxena
17BAL021
The exemption limit for investment in financial instruments under 80C was hiked by Rs 50,000 to Rs 1.5 lakh while the deduction limit for interest payable on a home loan (self-occupied property) was raised from Rs 1.5 lakh to Rs 2 lakh.Apart from raising deduction limits for health insurance premiums from Rs 15,000 to Rs 25,000 - the new limit for senior citizens was Rs 30,000 - he announced an additional deduction of Rs 25,000 for differently-abled persons under Section 80DD and Section 80U of the Income-tax Act. For very senior citizens, aged 80 years or more, who weren't covered by health insurance, he allowed deduction of Rs 30,000 towards medical expenditure. He also hiked the deduction limit with respect to specified diseases of serious nature from Rs 60,000 to Rs 80,000 for senior citizens.
17bal066
Abhilekh Tiwari
Union Budget 2018 has proposed benefits for senior citizens as increase in tax-free interest income, higher deduction for health insurance premium and a revamped senior citizen investment scheme. The higher limit for tax-free interest income from banks and the enhanced investment limit in senior citizens’ investment scheme will help them.
The scheme under consideration is Pradhan Mantri Vaya Vandana Yojana (PMVVY).This scheme runs through Life Insurance Corporation (LIC) which has the sole right to operate it.This scheme was available for investment since 4 May 2017 and was earlier open for investment till 3 May 2018.The budget has now proposed to keep it open for investment till March 2020. Apart from extending the scheme’s investment duration, the limit of Rs7.5 lakh per senior citizen would also be enhanced to Rs15 lakh.The scheme provides an assured return of 8% to 8.30% per annum, depending on whether you choose to get your pensions on a monthly, quarterly, half-yearly or yearly basis. The interest earned is taxable.The scheme also allows premature exit or withdrawal for treatment of any critical or terminal illness of self or spouse. On premature exit, 98% of the purchase price shall be refunded.
Priyanka Bajpai
17BAL098
The government seems keen to have more money in the system which is evident from the fact that India's fiscal deficit might rise to 3.5% in FY 19. Also, this seems to be a measure to recover the capital lost in the bank bailouts by the govt previous fiscal year.These are the following modifications in the banking sector: -
Allow full tax deduction for provisioning of non-performing assets at lenders.
Reduce the tenure of tax-exempted retail term deposits to minimum of 3 years from current 5.
Allow tax relief for proceedings under insolvency code.NBFCs must be treated at a par with banks for tax provisions.Provide blanket TDS exemption for payments to banks.Abolish MAT for units in IFSCs.ELSS is specially created to give taxpayers the dual benfit of saving taxes under Sec 80C with the lowest lock-in period.
Arjun Singh Tomar
17BAL077
The ideas for union budget 2018 to make common man's personal finance less taxing-
For senior citizens, there will be raise in exemption in of interest income on deposits with banks and post offices to be increased from Rs 10,000 to Rs 50,000. And the best part is that TDS will not be deducted for the same. This move is applicable to all fixed deposits schemes and recurring deposit schemes. As far as health insurance premiums go, deduction for the same has been raised Rs 30,000 to Rs 50,000 under section 80D. For critical illness, the deduction for medical expenditure in respect of 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 in respect of all senior citizens, under section 80DDB.
Finance Minister rationalised Long Term Capital Gains (LTCG) tax. FM for equities proposed to tax long term capital gains exceeding Rs 1 lakh at the rate of 10 percent without allowing the benefit of any indexation. However, all gains up to 31st January, 2018 will be grandfathered. A tax on distributed income by equity oriented mutual fund at the rate of 10 percent was introduced as well.
Reduce LTCG holding period for REITs.
Hike tax-free limit for medical allowance.
Make home insurance mandatory and offer tax deduction on premium.
Introduce individual retirement account.
Include low-risk hybrid funds under Section 80C.
Reduce holding period for LTCG from debt funds.
shantanu shastri
17bal108
The finance minister, Arun Jaitley divided his budget proposal into 10 distinct themes: Farmers; rural population; energizing youth; poor and underprivileged; infrastructure; financial sector; digital economy; public service; prudent fiscal management; and tax administration.
Some of the changes of which are:
Corporate taxation in Union Budget 2018-Reduce corporate tax rate to 25% as promised (currently 30%); some predict the government will lower it to 27-28% as the first step. Simultaneous rationalisation of the rates of Dividend Distribution Tax and Minimum Alternate Tax (MAT). Rationalisation of the interest deduction limitation provisions by excluding interest paid to unrelated parties. Carve out tax provisions to streamline proceedings under Insolvency and Bankruptcy Code. Continuation of investment allowance with lower thresholds to boost capex.
Banking sector in Union Budget 2018-Allow full tax deduction for provisioning of non-performing assets at lenders. Reduce the tenure of tax-exempted retail term deposits to minimum of 3 years from current 5.Allow tax relief for proceedings under insolvency code. NBFCs must be treated at a par with banks for tax provisions.
FINANCIAL SECTOR: Foreign Investment Promotion Board (FIPB) to be abolished. Commodities market: panel to study legal framework for spot and derivative markets. Resolution for mechanism for financial firms. Cyber-security: Computer emergency response team to be set up. Listing of PSEs will foster public accountability; revised mechanism for time-bound listing.
FISCAL MANAGEMENT:Total budget expenditure: Rs21 trillion.Rs3,000 crore to implement various budget announcements. Defence expenditure excluding pensions: Rs2.74 trillion. Consolidated outcome budget for all ministries being created. Fiscal deficit for FY18 pegged at 3.2% of GDP. Revenue deficit for FY18 at 1.9%.
Shalini Mishra
17bal107
The government seems keen to have more money in the system which is evident from the fact that India's fiscal deficit might rise to 3.5% in FY 19.
Also, this seems to be a measure to recover the capital lost in the bank bailouts by the govt previous fiscal year.The scheme under consideration is Pradhan Mantri Vaya Vandana Yojana (PMVVY).This scheme runs through Life Insurance Corporation (LIC) which has the sole right to operate it.
Similarly various other measures have also been taken.The interest earned up to Rs 50000 from deposits with banks and post offices will be exempted instead of Rs 10,000 now. This will ensure that the TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
SOMESHWAR SINGH CHANDEL
17BAL112
The three pillars of the economy are not in a very good condition at present.Exports are barely growing at 12-odd per cent monthly year-on-year basic and private investment announcements have halved since 2014-15 to around Rs 8 lakh crore. The other engine of the economy, agriculture has also been sputtering under massive agri distress where farmers are unable to get remunerative prices for their produce.
After the Gujarat elections the government focuses on the next upcoming elections. In its singular focus on the vote bank, has the government taken its eyes off the other pressing needs - exports growth, job creation and reviving private sector investments.
Like every Financial Year, this FY has also given many people good vibes about their expenses and changes in tax slots. This Budget has brought a smile on many faces but some heads went down with this huge announcement. Finance Minister Arun Jaitley announced a hike on the minimum support price for Kharif crops by 1.5 times. Senior citizens got a lifetime relief with no TDS on FDs and post office deposits upto Rs 50,000. The custom duty on mobile phones has risen from 15% to 20%. This is supposed to help domestic manufacturers. Standard deduction of Rs 40000 for salaried people, crypto-currencies granted no legal status. Rs 7100 crore Package for the textile sector. With a cut in excise duty, Petrol price got deducted by Rs 4.48 rupee/litre, with a cut in excise duty, Diesel price got deducted by Rs 6.33 rupee/litre, companies registered as farmer-producer companies with turnover of Rs 100 crore relieved by 100% tax deduction. Since the middle class had expected change in tax slabs but change in personal income taxes might have disappointed them, to create more jobs, a tax cut for big corporates was needed, which could have helped revive private investment.
Gourav Asati
17bal023
In its singular focus on the vote bank, has the government taken its eyes off the other pressing needs - exports growth, job creation and reviving private sector investments. Of these, kick-starting private sector investments was way beyond its control. Capacity utilisation in most industries, barring a handful, is still in the 70-75 per cent range. Even at an ambitious 15 per cent growth, the private sector would only start thinking of reinvesting in no less than 16-18 months. So, it had a great opportunity to create avenues of export growth, push services sector growth since job creation there is rapid and in large numbers and most importantly creating a roadmap for job creation. The government expects that its investment of nearly 6 lakh crore in infrastructure and over 14 lakh crore in rural areas will be able to substantially increase job growth. But even if this investment happens, the job growth may play out far slower than expected.
What makes this Budget ugly is the fact that the government breached the fiscal deficit target of 3.2 per cent and will close the fiscal at 3.5 per cent. Sure, the FRBM allows such latitude up to 0.5 per cent. But this balance sheet will also fail to deliver the 3.2 per cent target next year as well (deficit projected at 3.3 per cent). Not sticking to the fiscal roadmap has consequences. For one, global credit ratings agencies will look at it unfavourably and a lower rating has a bearing on foreign investments. Higher fiscal deficit also raises government borrowings, which in turn crowds borrowings the private sector can take. Besides, it causes inflation and generally leads to the government raising taxes to make up for the shortfall. That's the last thing the government can afford now.
Aryan Singh Chouhan
17bal012
Like every Financial Year, this FY has also given many people good vibes about their expenses and changes in tax slots. This Budget has brought a smile on many faces but some heads went down with this huge announcement. Finance Minister Arun Jaitley announced a hike on the minimum support price for Kharif crops by 1.5 times. Senior citizens got a lifetime relief with no TDS on FDs and post office deposits upto Rs 50,000. The custom duty on mobile phones has risen from 15% to 20%. This is supposed to help domestic manufacturers. Standard deduction of Rs 40000 for salaried people, crypto-currencies granted no legal status. Rs 7100 crore Package for the textile sector. With a cut in excise duty, Petrol price got deducted by Rs 4.48 rupee/litre, with a cut in excise duty, Diesel price got deducted by Rs 6.33 rupee/litre, companies registered as farmer-producer companies with turnover of Rs 100 crore relieved by 100% tax deduction. Since the middle class had expected change in tax slabs but change in personal income taxes might have disappointed them, to create more jobs, a tax cut for big corporates was needed, which could have helped revive private investment
Rishi Raj Pandey
17BAL102
Section 80C presently provides a tax break of up to Rs 1.5 lakh for investments made by individuals or HUFs in tax-saving investments such as Public Provident Fund (PPF), Employee Provident Fund (EPF), National Saving Certificate (NSC), Sukanya Samriddhi Yojanana (SSY) Equity Linked Saving Scheme (ELSS), fixed deposits, premium paid towards a life insurance policy, principal component of a housing loan repayment, expenses on children’s tuition fee etc. Deduction of the said amount is allowed from Gross Total Income (before arriving at taxable income) per annum for investment in one or more specified schemes.Section 80C is primarily an investment linked tax prospect that helps reduce an individual’s tax liability. The overall cap of Rs. 150,000 applies jointly to section 80C, 80CCC (pension) and 80CCD (New Pension Scheme) and is not enough considering the inflation trend of the Indian economy. Even the computation of deduction under section 80C is quite intricate as there are numerous internal caps and an overall cap. Finance Minister Arun Jaitley in Budget 2018 announced a new tax of 10 per cent on long-term gains from investing in stock markets and equity mutual funds. Under the proposed new tax, profits of more than Rs. 1 lakh from stock and equity mutual fund investments held over one year will be taxed at 10 per cent. At present, profits from stock and equity mutual fund investments held for more than 12 months are tax exempt. However, long-terms capital gains made on investments up to January 31, 2018, will not be taxed.
Suyash Vijayvergiya
17BAL054
Government says that it is firmly on course to achieve high growth of 8% plus as manufacturing, services and exports are back on good growth path. While GDP growth at 6.3% in the second quarter of 2017-18 signalled turnaround of the economy, growth in the second half is likely to remain between 7.2% to 7.5%. The Union Minister for Finance and Corporate Affairs Shri Arun Jaitley while presenting the General Budget 2018-19 in Parliament today said that Indian society, polity and economy had shown remarkable resilience in adjusting with the structural reforms. IMF, in its latest Update, has forecast that India will grow at 7.4% next year in the backdrop of services resuming high growth rates of 8% plus, exports expected to grow at 15% in 2017-18 and manufacturing back on good growth path.
Ayush Chaurasia
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"This budget blends fiscal prudence with the requirements and needs to the economy. This year there was series of circumstances, including one month less in GST revenue, this needs to kept in mind,"
KEY POINTS INCLUDED IN BUDGET 2018-19 : -
Introduction of new National Health Protection Scheme to cover 10 crore poor and vulnerable families by providing up to Rs 5 lakh per family per year.
The launch of ‘Revitalising of Infrastructure and Systems in Education’ by 2022 with a total investment of Rs 1 lakh crore in next 4 years.
The government will contribute 12 per cent of wages of new employees in EPF for all sectors for the next 3 years.
The government to take all steps to eliminate use of cryptocurrencies which are being used to fund illegitimate transactions.
The government insurance companies will be merged into a single entity, and subsequently listed in the stock exchange.
Introduction of new gold policy to revamp Gold Monetisation Scheme.
No Change in Personal Income Tax Rate for salaried class.
Standard Deduction for a salaried employee of Rs 40,000 provided. This Standard Deduction is towards transport, medical reimbursement.
80 D Health Insurance Premium limit is increased from Rs.30000 to Rs.50000 for senior citizen.
Introduction of Long Term Capital Gain @ 10% for profit above Rs 1 Lakh on stock and mutual fund investments.
Equity-based Mutual Funds are now being taxed. FM introduce tax on Distributed Income Of MFs at 10%.
Most-liked about Budget 2018:
National Health Protection Scheme.
Contribution of 12% by the government towards EPF for new employees for 3 years.
New Gold Policy.
Most-disliked about Budget 2018:
No change in Income tax rate and slab.
Introduction of LTCGT at Equity Investments.
10% Distribution tax on Mutual Funds.
TUSHAR CHOUDHARY
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According to the Finance Bill 2018, With a view to providing a level playing field between growth-oriented funds and dividend paying funds, in the wake of new capital gains tax regime for unit holders of equity oriented funds, it is proposed to amend the said section to provide that where any income is distributed by a Mutual Fund being, an equity oriented fund, the mutual fund shall be liable to pay additional income tax at the rate of ten per cent on income so distributed.
ADHIRAJ SINGH
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Every investment option permitted under Section 80C comes with a mandatory lock-in period. For example, an ELSS come with a mandatory lock-in period of three years, whereas a National Savings Certificate (NSC) has a lock-in period of five years. Public Provident Fund (PPF) is a 15-year product, though it allows investors to take loans after the third year.
Unlike an ELSS, the new debt scheme will not qualify for tax-free returns. Equity mutual fund investments held over a year qualify for long-term capital gains tax which is nil now. Since ELSSs come with a lock-in period of three years, they qualify for zero capital gains tax on returns.
However, debt mutual funds are taxed differently. Debt funds held over three years qualify for long-term capital gains tax of 20 per cent with the indexation benefit. According to mutual fund advisors, this translates into an effective tax rate of 5-6 per cent in the current scenario.
Budget 2018: Personal finance highlights not to be missed | ETWealth
https://www.youtube.com/watch?v=qHR4tHynlNY
Budget Disappoints Share Market, Middle Class | Union Budget Highlights | CNBC Awaaz
https://www.youtube.com/watch?v=9-hbA0j3y2Q
https://www.youtube.com/watch?v=Ncjcg97P1Tg
Budget 2018 New Changes in tax for Equity and Mutual fund Investors | Long term Capital gain @ 10%
https://www.youtube.com/watch?v=B2X9hJ7B18Y
Mutual Funds and Shares New Rule | 10% LTCG Tax on Stocks/Equity Mutual Funds | Budget 2018
https://www.youtube.com/watch?v=64XVQ4GwnXg
Watch the above videos..!!
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In the busdget of 2018 Finance Minister Arun Jaitley announced a new tax of 10 per cent on long-term gains from investing in stock markets and equity mutual funds.Senior citizens got a lifetime relief with no TDS on FDs and post office deposits upto Rs 50,000. Recognised Provident Fund too has been given a tax exemption provided the employee invests 12% of their earnings.The budget also offered to increase the investment limit under Pradhan Mantri Vaya Vandana Yojana to Rs 15 lakh from the extent limit of Rs 7.5 lakh.Also the budget came up with 100% deduction to companies registered as Farmer Producer Companies with annual turnover up to Rs. 100 crore. What makes this Budget ugly is the fact that the government breached the fiscal deficit target of 3.2 per cent and will close the fiscal at 3.5 per cent. Sure, the FRBM allows such latitude up to 0.5 per cent.Not sticking to the fiscal roadmap has consequences. Higher fiscal deficit also raises government borrowings, which in turn crowds borrowings the private sector can take.
Naman Khode
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this budget aimed at reducing the disparity between NPS and other investing option. the low taxation in the remaining 40% of amount at the time of withdrawal encourages people to invest more in NPS. as 60% of the whole amount can be withdrawn , it will be helpful for new generation of businessmen who needs cash in hand.
MANYA ANJARIA
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I think the the equity linked savings scheme is the best scheme to invest in because it has the lowest lock in period among all stocks. Finance minister Arun Jaitely has also proposed to increase the limit of deduction for medical expenses in respect of certain critical illness from 60000 for senior citizens. The budget 2018 offers to increase the investment limit under pradhan mantri vaya vandana yojana from 7.5 lac to Rs 15 lacs.A country like India has lot of money stacked up.in savings account and fd's and government some of that part too at lower rates.
Finance Minister Arun Jaitley in his Budget 2018 discourse has proposed to excluded 40 percent of the aggregate sum payable to the National Pension System (NPS) endorser on conclusion of his record or on his quitting if there should arise an occurrence of non-employee supporters. The tax break for non-salaried people will now be at standard with salaried people.
Under the current arrangements of provision (12A) of area 10 of the Act, an employee adding to the NPS is permitted an exception in regard of 40 percent of the aggregate sum payable to him on conclusion of his record or on his quitting. This exclusion isn't accessible to non-employee supporters. With a specific end goal to give a level playing field, it is proposed to change proviso (12A) of segment 10 of the Act to stretch out the said advantage to all endorsers. This revision will produce results, from April 1, 2019, and will likewise apply in connection to the appraisal year 2019-20 and consequent evaluation years.
Up to 60 percent of the development corpus can be pulled back as a singular amount on development at age 60, yet in the event that the supporter exits from NPS before he turns 60, at that point just up to 20 percent of the corpus can be pulled back.
Govind saini
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Equity Linked Savings Scheme or ELSS is the only mutual fund scheme that qualifies for tax deductions of up to RS 1.5 lakh under section 80C of the income Tax Act .As ELSS is has risk so it invests mostly in stock and other conservative parties are not able to be a part of it.Although mutual fund industry is planning to bring another new debt scheme which would address conservative investors.Every investment option permitted under 80C comes with a lock in period and in the same way ELCC has a lock in period of 3 years and the new debt that has been taken into account will not qualify the tax free returns like that in case of ELCC.
PPF is the long term investment option that is backed with good interest rate and returns that are fully exempted from tax.It is compounded annually and is credited at the end of the year but point to be noted is that interest is calculated every month. The maximum amount that is deposited every year is RS 150000 in an account at present.
Separate limit of tax exemption for life insurance of RS 50000 per annum ,no GST on pure protection instruments will be exempted from GST and the latest budget has also said about the level playing for all pension schemes and it also provide separate tax exemption of up-to 50,000 and it also changed income tax slabs in this budget.
NSC schemes specially designed for government employees ,businessmen and other salaried classes who are income tax assesses.There is no maximum limit for investment and no tax reduction.Certificates can also be kept as collateral security to get loan from banks and trust and HUF cannot invest.
NPS has now been made partially tax exempt and EPF which was tax free is now partially taxable
Among all PPF according to me is very safe because there is no tax reduction and there is a lot of security given to an investor.
In above mentioned mail i forgot to mention my roll number.
priyangi mohi
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National Pension Scheme (NPS) is a government-sponsored pension scheme. It was launched in January 2004 for government employees. However, in 2009, it was opened to all sections. The scheme allows subscribers to contribute regularly in a pension account during their working life. On retirement, subscribers can withdraw a part of the corpus in a lumpsum and use the remaining corpus to buy an annuity to secure a regular income after retirement.
In recent budget finance minister has increased the tax limit of national pension scheme from 40% to 60%.
Om shankar kiradoo
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Investment schemes were again given a thumbs up within the current budget and it went ahead with increasing investment within the country and for the country.
The budget and the outlay of schemes has proved very beneficial till now and will also improve further in the country.
Ayushi dubey
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Investment schemes were again given a thumbs up within the current budget and it went ahead with increasing investment within the country and for the country.
The budget and the outlay of schemes has proved very beneficial till now and will also improve further in the country.
Ayushi dubey
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Equity Linked Saving Schemes are investments option with short lock in period of 3 years .ELSS,s have the potential to offer superior returns as the investment is in stocks . the schemes provide you flexibility in taking the risk while investing. This has an alternative to the lump-sum investment option by systematic investment plan (monthly investment).
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POLITICAL FLAVOR OF UNION BUDGET 2018
For the first time, the Union Budget was presented in a bilingual format.
FM Arun Jaitley presented the budget in "Hinglish" in an attempt to connect to the rural masses.
Drawing parallel's between PM Modi's roots and Economically weaker section by Mr. Jaitley said " अध्यक्ष्य महोदय, देश का वर्त्तमान शीर्ष नेतृत्व गरीबी को बहुत करीब से देखकर, गरीबी में जीकर यहाँ पहुंचा है| एससी/एसटी वर्गों की पिछड़ों की, आर्थिक रूप से कमज़ोर वर्ग की जो चिंताए होती हैं, उनसे भली भांति परिचित हैं|
गरीब और माध्यम वर्ग उनके लिए केस स्टडी नहीं हैं, बल्कि वो खुद एक केस स्टडी हैं | "
Touching on the aspirations of Aam Nagrik the FM said " Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the Government last year shall connect 56 unserved airports and 31 unserved helipads across the country.सर्कार की इस पहल से हवाई चप्पल पहेन्ने वाले नागरिक भी जहाज से यात्रा कर रहे हैं
Giving an interesting spin to the demonetization scheme, FM called it a celebration for the honest " We are enthused by this success of our measures and we pledge to continue to take all such measures in future by which the black money is contained and the honest taxpayers are rewarded. Demonetization was received well by honest taxpayers as “imandari ka utsav” only for this reason."
Finally Mr. Jaitley ended the speech with an excerpt from Swami Vivekananda's speech and says ,"I am sure the New India which we aspire to create now will emerge. Swami Vivekanand had also envisioned decades ago in his Memoirs of European Travel, ‘‘You merge yourselves in the void and disappear, and let new India arise in your place. Let her arise – out of
the peasants’ cottage, grasping the plough; out of the huts of the fisherman. Let her spring from the grocer’s shop, from beside the oven of the fritterseller. Let her emanate from the factory, from marts, and from markets. Let her emerge from groves and forests, from hills and mountains’’".
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Read Gujarat Budget Released last week on 20th Feb.
**Excise duty will be hiked from Rs 100/litre to Rs 300/litre on foreign liquor (spirit and wine) being imported in the state. Special fee will be levied on spirit, wine and beer being imported from abroad.**
***Economic growth: The Gross State Domestic Product (GSDP) of Gujarat declined from 10.5% in
2014-15 to 10.1% in 2016-17.***
For further details visit the link below:
http://www.prsindia.org/uploads/media/State%20Budget%202018-19/Gujarat%20Budget%20Analysis%202018-19.pdf
The Union Budget 2018 was excepted to be a mix bag of announcements for many tax payers.
1) No changes in the structure of tax slabs for salaried tax payers.
2) There is a standard deduction of Rs 40,000 is proposed for salaried employees. This move was brought about keeping in mind that salaried individuals have been paying more tax than individual business owners. This standard deduction in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses. However, one needs to keep in mind that, the transport allowance at enhanced rate shall continue to for differently-abled. And, other medical reimbursement benefits in case of hospitalisation etc, which are currently applicable to employees shall also continue. This standard deduction move will reduce the tax liability for middle class employees as well as pensioners.
3)Abolition dividend distribution tax.
4)Bring back standard deduction for salaried class.
5)Retain long term capital gain tax benefit on equities.
6) Facilitate donation and gifting of investment.
7)Reduce GST on insurance product from 18-5%.
8)Reduce LTCG holding period for REITs.
9)Hike tax-free limit for medical allowance.
10)Finance Minister rationalised Long Term Capital Gains (LTCG) tax. FM for equities proposed to tax long term capital gains exceeding Rs 1 lakh at the rate of 10 percent without allowing the benefit of any indexation. However, all gains up to 31st January, 2018 will be grandfathered. A tax on distributed income by equity oriented mutual fund at the rate of 10 percent was introduced as well.
Abhinav silakari
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Quoting from a recent article at Livemint the benefits of Pradhan Mantri Vaya Vandana Yojna under budget 2018 and modification of other pension scheme :
The scheme can be purchased offline as well as online, through the Life Insurance Corporation of India (LIC), which has been given the sole rights to operate it. The scheme provides an assured return of 8% to 8.30% per annum, depending on whether you choose to get your pensions on a monthly, quarterly, half-yearly or yearly basis. For the monthly option, the return is 8% and it is 8.30% for the annual option. The interest earned is taxable. If a pensioner survives the policy term (10 years), its purchase price along with final pension instalments shall be payable. The scheme also allows premature exit or withdrawal for treatment of any critical or terminal illness of self or spouse. On premature exit, 98% of the purchase price shall be refunded. On death of the pensioner during the policy term of 10 years, the purchase price shall be paid to the beneficiary.
Should you buy?
While earlier the maximum pension that an investor would have earned per month under the scheme was Rs5,000—or Rs60,000 a year—it will now increase to up to Rs10,000 a month or Rs1.2 lakh a year. This is at par with other schemes such as Senior Citizens Savings Scheme (SCSS), which offers a similar return of 8.3% per annum. Given that both schemes will have a cap of Rs15 lakh each, senior citizens can consider dividing their retirement corpus and invest in these schemes. In the current interest rate scenario, a fixed return of 8.3% return per annum is a good option.
Palak Jain
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ELSS (Equity Linked Savings Scheme) Fund used be a tax -saving fund and continues to be in the context of contributed capital. However, it will no longer enjoy the double benefit and the capital gains will be taxed tot he extent of 10%.
Putting in money in Fixed deposits will still furnish you a mere 6% pre tax and on savings deposits you will earn 4% pre-tax.
So, even if your mutual fund was simply earning as much as the index, the CAGR for 25 years being 15%. A 10% tax will still be fetching you a 13.5% return after tax.
Say, if you were to not invest for the long term, be it mutual funds or equity markets directly and just play on short term gains. You will have to continue to pay 15% tax on your STCG.
These facts have been laid down for you to anlayse whether it is still viable to invest in a long-term savings mutual fund after re-introduction of LTCG tax regime.
Equity Linked Savings Scheme(ELSS), I think is the best scheme to invest because it has lowest lock-in period among all the tax saving. The Budget 2018 offered to increase the investment limit under Pradhan Mantri Vaya Vandana Yojana to Rs 15 lakh from the extent limit of Rs 7.5 lakh. The exemption for senior citizens on account of health insurance premium is raised to Rs 50000 from extant Rs 30000 under section 80D. The Finance Minister Arun Jaitley also proposed to increase the limit of deduction for medical expenditure in respect of certain critical illness from Rs 60000 in case of senior citizens and from Rs 80000 in case of very senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB. In this budget, the Finance Minister Arun Jaitley made it clear that these concessions will give extra tax benefit of Rs 4,000 crore to senior citizens.
KEY POINTS INCLUDED IN BUDGET 2018-19 : -
Introduction of new National Health Protection Scheme to cover 10 crore poor and vulnerable families by providing up to Rs 5 lakh per family per year.
The launch of ‘Revitalising of Infrastructure and Systems in Education’ by 2022 with a total investment of Rs 1 lakh crore in next 4 years.
The government will contribute 12 per cent of wages of new employees in EPF for all sectors for the next 3 years.
The government to take all steps to eliminate use of cryptocurrencies which are being used to fund illegitimate transactions.
The government insurance companies will be merged into a single entity, and subsequently listed in the stock exchange.
Introduction of new gold policy to revamp Gold Monetisation Scheme.
No Change in Personal Income Tax Rate for salaried class.
Standard Deduction for a salaried employee of Rs 40,000 provided. This Standard Deduction is towards transport, medical reimbursement.
80 D Health Insurance Premium limit is increased from Rs.30000 to Rs.50000 for senior citizen.
Introduction of Long Term Capital Gain @ 10% for profit above Rs 1 Lakh on stock and mutual fund investments.
Equity-based Mutual Funds are now being taxed. FM introduce tax on Distributed Income Of MFs at 10%.
Most-liked about Budget 2018:
National Health Protection Scheme.
Contribution of 12% by the government towards EPF for new employees for 3 years.
New Gold Policy.
Most-disliked about Budget 2018:
No change in Income tax rate and slab.
Introduction of LTCGT at Equity Investments.
10% Distribution tax on Mutual Funds.
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Palak Gupta
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