Recently the 2018-19 budget was announced. Have you pondered over its impact on the Indian economy? Some of the schemes followed are:-
- Digital India: This was introduced by Prime Minister Narendra Modi on 1st July 2015 to make India transform into a digitally empowered society and knowledge economy. It is still taking time to make the desired impact and fulfill all its objectives. Making the whole country digitally empowered takes time and efforts.
- Make in India: Launched on 25 September 2014, this movement ensures that things are made in India. A lot of purchases are made from other countries to India. Hence it is essential to begin making goods in India so as to bring balance between imports and exports.
- WIFI in Trains: Free WIFI will be provided in trains and other public places.
- GST: Goods and Service Tax(GST) was introduced in July 2017. You don’t have to pay n number of taxes, just pay GST at once and once for all.
- Demonetization: In order to check corruption, old 500 and 1000 rupee notes were abolished and new 500 and 2000 rupee notes were introduced by PM Narendra Modi.
What could be the impact on Indian economy regarding tax changes From April-1-2018?
- Standard Deduction will be reintroduced. The salaried class and the pensioners will be benefitted from this.
- Medical reimbursements and transport allowances would become taxable. That will happen as part of your salary.
- Cess levied on your tax liability will get hiked from 3% to 4%. It is called Health and Education Cess. This will assist the government in meeting the education and healthcare needs of rural folk.
- Tax on Long-term Capital gains on equity and equity oriented mutual funds will be introduced. The gains from equity shares and equity oriented mutual funds will be grandfathered.
- Tax-exempt limit of limit income for senior citizens will be increased along with the threshold limit for the TDS. This is for senior citizens relief.
- There will be a hike in the deduction limit on medical expenditure. In the case of equity mutual funds, at the rate of 10%, the tax will be levied on the dividends distributed under section 80D and section 80DDB for senior citizens.
- Pradhan Mantri Vaya Vandana Yojana will be extended till 31st March 2020.
- GST would apply only for the mean rate and the higher rate. The mean rate is for essential commodities while the higher rate is for luxurious commodities.
How will it affect the salaried class?
There were no changes made in the tax slabs for the salaried class in the 2018-19 budget. The standard deduction from the gross income of the individuals will be reintroduced as per the proposal of the finance minister. The standard deduction will replace transport and medical allowances so the effective additional benefit would be an additional income exception too.
How will it affect the peasant?
Relief shall be provided to the peasant class. Various agricultural reforms have been introduced in a bid to double farmer income by 2022. Union budget 2018 has key implications for peasants and the agricultural sector.
How will it affect the businessmen and women?
There shall be a boost to agriculture, healthcare education and infrastructure. The Angel Tax clause which was included in 2012 will be scrapped. The budget for Digital India scheme has been doubled. Micro, Small and Medium Enterprises will be given relief. Long-Term Capital Gain taxes will return.
Everything would become digital. So, rather than cash payments, there will be only card payments. More and more internet users will bring in them more awareness on things. The peasants will get their fair share of help. Healthcare and skill development will benefit. Senior citizens can live without much hassle. GST simplifies taxes and makes it easier for a common man to purchase anything.
More schools were built and more tribal children were given access to education. Art and culture shall be preserved through more cultural activities in schools and colleges. Training shall be provided in sports and skill development. The health and wellness shall be developed and brought closer to the homes of the general public.
Overall we can have hopes that 2018-19 budget will help improve not only the economy but also the conditions of the people.