Indian Finance Bill 2017: Budget Highlights & Tax Rates Overview

2. INDIA BUDGET HIGHLIGHTS FINANCE BILL 2017

3. BUDGET AT GLANCE

6. Rupee Comes from

7. Rupee Goes to

8. Debt and Deficit Statistics (Rs. In Crores).

9. Debt and Deficit Statistics (Rs. In Crores).

10. Debt and Deficit Statistics (as Percentage of GDP).

11. Debt and Deficit Statistics (as Percentage of GDP).

12. Deficit Trends

13. FISCAL DEFICIT - MEANING • The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included. • http://economictimes.indiatimes.com/definition/fiscal-deficit

14. PRIMARY DEFICIT - MEANING • Amount by which a government's total expenditure exceeds its total revenue, excluding interest payments on its debt. • http://www.businessdictionary.com/definition/primary-deficit.html

15. REVENUE DEFICIT - MEANING • A revenue deficit occurs when the net income generated, revenues less expenditures, falls short of the projected net income. This happens when the actual amount of revenue received and/or the actual amount of expenditures do not correspond with budgeted revenue and expenditure figures. This is the opposite of a revenue surplus, which occurs when the actual amount of net income exceeds the projected amount. • http://www.investopedia.com/terms/r/revenuedeficit.asp

16. BUDGET DEFICIT - MEANING • Definition: Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government. • Description: Budgetary deficit is the sum of revenue account deficit and capital account deficit. If revenue expenses of the government exceed revenue receipts, it results in revenue account deficit. Similarly, if the capital disbursements of the government exceed capital receipts, it leads to capital account deficit. Budgetary deficit is usually expressed as a percentage of GDP • http://economictimes.indiatimes.com/definition/budgetary-deficit

17. RATES

18. CORPORATE TAX RATES

21. Section 115BA • Lower rate of 25% under section 115BA introduced by FA 2016 continues if the following conditions are satisfied • It applies to a domestic company set up and registered on or after 1.3.2016 • It is not engaged in any business other than business of manufacture or production of any article or thing and research in relation to, or distribution of , such article or thing manufactured or produced by it • Its total income is computed without tax holiday and special deductions • It has exercised an option which is not reversible for ever

22. MSME • Turnover base of Rs.50 cr of FY 15-16 • Peak depreciation rates reduced to 40% wef 1.4.17

25. Personal taxation

26. Tax Slab: Individual (Male/Female) below 60 years of age

27. Tax Slab: Individual (Male/Female) 60 years of age or more but below 80 years

28. Tax Slab: Individual (Male/Female) 80 years and above

29. Surcharge & Cess : Other than firm/company • Individual, HUF, AOP & BOI • Education Cess of 2% + Secondary & Higher Education Cess of 1% = 3%

30. Section 2 of Finance Act – Other aspects • 25% surcharge on tax under section 115BBE(3) : Sixth Proviso to section 2(3) for AY 17-18 itself • No TDS on surcharge in case of residents and domestic companies • No TDS on cess in case of residents and domestic companies except in case of salary income

31. Deduction under section 80CCG - ELSS AMENDED w.e.f. 01.04.2018(M – 36; N – C34)

32. Section 80CCG - Deduction - ELSS • 80CCG(5) : Newly inserted • (5) Notwithstanding anything contained in sub-sections (1) to (4), no deduction under this section shall be allowed in respect of any assessment year commencing on or after the 01.04.2018. • Provided that an assessee, who has acquired listed equity shares or listed units of an equity oriented fund in accordance with the scheme referred to in sub-section (1) and claimed deduction under this section for any assessment year commencing on or before the 01.04.2017, shall be allowed deduction under this section till the assessment year commencing on the 01.04.2019, if he is otherwise eligible to claim the deduction in accordance with the other provisions of this section.

33. Section 80CCG - COMMENTS • 80CCG was introduced by Finance Act, 2012 w.e.f 01.04.2013 • Section 80CCG provides for deduction of 50% amount invested in listed shares / units or Rs. 25,000 for 3 years if his GTI </= 12L and if he is a retail investor • Newly inserted 80CCG(5) says no deduction for AY 18-19 onwards • However, proviso protects previous investments & allows deduction for unexpired period up to AY 2019-20

34. Restriction on cash donations in respect of certain funds, charitable institutions, etc. SECTION 80G AMENDED w.e.f. 01.04.2018(M – 11; N – C35)

35. SECTION 80G AMENDED • 80 G (5D) – Amended. • No deduction shall be allowed under this section in respect of donation of any sum exceeding two thousand rupees (Rs.2,000/-) unless such sum is paid by any mode other than cash.

36. Section 87A - Marginal Relief AMENDED w.e.f. 01.04.2018(M – 29; N – C38)

37. Section 87A - Amended

38. Section 87A - COMMENTS • Section 87A applies to individual residents • Earlier – • Total income not exceeding Rs.5,00,000 • Rebate of 100% or Rs.5,000 whichever is less • Now – • Total income not exceeding Rs.3,50,000 • Rebate of 100% or Rs.2500 whichever is less • No tax upto Total Income of Rs. 3,00,000

39. Rationalisation of deduction under section 80CCD for self-employed individual SECTION 80CCD AMENDED w.e.f. 01.04.2018(M – 36; N – C33)

40. AMENDMENT IN SECTION 80CCD 80CCD(1)(b). (1) Where an assessee, being an individual employed by the Central Government on or after the 01.01.2004 or, being an individual employed by any other employer, or any other assessee, being an individual has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the Central Government, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited as does not exceed,— (a) in the case of an employee, 10% of his salary in the previous year; and (b) in any other case, twenty per cent (20%) of his gross total income in the previous year.

41. Section 80CCD - COMMENTS • Section 80CCD(1)(b) limits self-employed person’ (other than employee’) contribution • It has been increased to 20% of Gross Total Income • Overall limit of Rs. 1,50,000 remains the same as per 80CCE

42. Section 10(12B) - Pension from NPST Section 10 (12A) - Exempted to the extent of 40% of total amount payable to the employee on closure or opting out of the scheme; Section 10 (12B) - New Section: Proposed to provide exemption in case of partial withdrawal not exceeding 25% of the contribution made by an employee: Any payment from the National Pension System Trust to an employee under the pension scheme referred to in section 80CCD, on partial withdrawal made out of his account in accordance with the terms and conditions, specified under the Pension Fund Regulatory and Development Authority Act, 2013 and the regulations made thereunder, to the extent it does not exceed twenty five percent of the amount of contributions made by him;

43. Section 10(12B) - COMMENTS • Section 10(12A) was inserted by Finance Act, 2016 w.e.f 01.04.2017 – provided for exemption of 40% at closure / opting out of NPS • 10(12B) deals with partial withdrawal as per terms and conditions • Use of ‘employee’ is unintended. Should refer ‘subscriber’ • Exemption does not exceed 25% of his contribution • Accretion and employer’s contribution is taxable

44. Section 10(12B) - COMMENTS • As per sec 20(2)(b) of PFRDA Act 2013, withdrawals, not exceeding twenty-five per cent. of the contribution made by the subscriber, may be permitted from the individual pension account subject to the conditions, such as purpose, frequency and limits, as may be specified by the regulations • As per sec 20(2)(i) of PFRDA Act 2013, at exit, the subscriber shall purchase an annuity from a life insurance company in accordance with the regulations

45. Business general

46. Section 35AD – Exp on Specified business 3rd Proviso: W.e.f – 01-04-2018 M- 11, NC- 13

47. Section 35AD - COMMENTS • Section 35AD is provision providing for expenditure based deduction • It was introduced by Finance Act 2009 • It allows for 100% deduction of capital expenditure • It is now provided that the capital expenditure is required to be incurred in banking channel

48. Section 40A M- 16, NC- 15

49. Section 40A(2) - COMMENTS • Retro effect from 01.04.2017 • PY 2016-17 / AY 2017-18 • No SDT for AY 2017-18 onwards in respect of section 40 A(2) payments

50. Section 40A W.e.f – 01-04-2018 M- 11, NC- 15