Budget 2018 Update: Income Tax Slabs remain unchanged
Credit rating agency Moody's said that the 2018 Budget seems to be in line with the fiscal consolidation path and reinforced the agency's recent rating upgrade of India.
Having introduced many changes in the Income Tax for salaried individuals, the Union Budget 2018 has abstained from making any changes to the Tax slabs. Union Finance Minister Arun Jaitley, in his Budget today, has however introduced a Standard Deduction of Rs 40,000 for the salaried class. This is the first Budget after the GST rollout on July 1, 2017.
Pre-Budget expectations of the minimum income tax exemption being raised from Rs 2.5 lakh to Rs 3 lakh did not see the light of the day. However, the Standard Deduction, which was abolished with effect from Assessment Year 2006-07 has now been reintroduced. The Standard Deduction, which was expected to be Rs 1 lakh, was kept at Rs 40,000. This aims to bring the salaried class at par with businesses and self-employed professionals, who can claim a variety of expenses.as business expense to get tax reliefs.
Beginning his budget speech, Arun Jaitley said, “Recapitalised banks have an ability to support growth. Indian economies have performed well since our government took over. India is expected to become the fifth largest economy very soon… This year’s budget will focus on consolidation and agriculture, infrastructure and healthcare”.
Being the last budget before the 2019 general elections, the FM opted to pick out sops for the agri sector. A variety of schemes were announced to promote agriculture sector – animal husbandry, fisheries, organic farming. His Budget speech in Hindi was to ensure that he was understood by the rural audience as well.
Mentioning the announcement made by Prime Minister Narendra Modi, that of doubling farmers revenue 2 times by 2022, Jaitley said that the minimum support price of all crops will increase at least 1.5 times production cost. Healthcare schemes will cover 10 crore poor families. This, per the Finance Minister, is going to be the world’s largest government-funded healthcare program. 50 crore people are expected to benefit by Rs 5 lakh per family per year.
Credit rating agency Moody’s said that the 2018 Budget seems to be in line with the fiscal consolidation path and reinforced the agency’s recent rating upgrade of India.
An additional Rs 11,000 crore is expected to come into the government kitty, as the Health and Education cess will be increased to 4% from 3%. However, the Standard Deduction will result in reducing the revenue by Rs 8,000 crore, said that Finance Minister.
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