UNION BUDGET 2017 - 18 TAX & INVESTMENT VIEW POINT Welcome to - - PowerPoint PPT Presentation

UNION BUDGET 2017 - 18

TAX & INVESTMENT VIEW POINT

Welcome to the 12th Budget Presentation

State of the Global Economy

Political developments during the last year

Brexit.  Trump Victory. 

State of the Global Economy

Economic Impact of political development

Signs of reversal for – Globlisation of goods. Globlisation of services. Globlisation of people.   

State of the Global Economy

Change in value of currency against US$

Rank Country Change in % 1 Russian Ruble 11.49 2 Brazilian Real 11.21 3 Canadian Dollar 0.12 4 US Dollar 0.00 5 Saudi Arabian Riyal 0.00 6 South Korean Won

• 0.24

7 Japanese Yen

• 0.53

8 Australian Dollar

• 1.18

9 Indonesian Rupiah

• 1.40

10 Indian Rupee

• 1.71

* Source : www.x-rates.com

Rank Country Change in % 11 Swiss Franc

• 3.10

12, 13 14, 15, 16 Euro Germany, Italy, Spain, Netherlands , France

• 5.42

17 Chinese Yuan Renminbi

• 6.30

18 British Pound

• 12.88

19 Mexican Peso

• 20.03

20 Turkish Lira

• 33.73

India stands out as a bright spot

Changes between 01/04/2016 to 31/01/2017

State of the Global Economy

Change in Indices

Rank Country Change in % 1 Brazil - Bovespa 27.91% 2 Russia - MICEX 19.42% 3 Japan - NIKKEI 225 17.80% 4 Germany - DAX 17.77% 5 Saudi Arabia - Tadawul All Share 15.93% 6 U K - FTSE 100 15.51% 7 Canada - S&P/TSX Composite 14.48% 8 Australia - S&P/ASX 200 12.43% 9 USA - Dow 11.64% 10 France - CAC 40 9.87%

* Source : www.investing.com

India stands out as a bright spot

Changes between 01/04/2016 to 31/01/2017

Rank Country Change in % 11 Netherlands - AEX 9.72% 12 India - Sensex 9.44% 13 Indonesia - IDX 9.31% 14 Spain - IBEX 8.29% 15 Swizerland - SMI 7.85% 16 China - Shanghai Composite 5.00% 17 Turkey - BIST 100 4.78% 18 Korea - KOSPI 4.76% 19 Italy - FTSE MIB 4.58% 20 Mexico - IPC 2.04%

State of the Global Economy

Growth of the top 20 economies of the world

Rank Country GDP Growth 1 India 7.30 2 China 6.80 3 Indonesia 5.02 4 Spain 3.00 5 Netherlands 2.40 6 Korea 2.30 7 United Knigdom 2.20 8 Mexico 2.20 9 United States 1.90 10 Australia 1.80

* Source : www.tradingeconomics.com

Rank Country GDP Growth 11 Germany 1.50 12 Canada 1.30 13 Swizerland 1.30 14 Japan 1.10 15 France 1.10 16 Italy 1.00 17 Saudi Arabia 0.90 18 Russia (0.40) 19 Turkey (1.80) 20 Brazil (2.90)

India stands out as a bright spot

GDP for the year 2016

State of the Global Economy

Increase in the policy rates of US Federal Reserve

5 years back 3 years back 2 years back 1 year back Jan – 2017 (Present) 0.12 % 0.07 % 0.12 % 0.38 % 0.56 %

Lower Capital inflows. Higher outflows.  

State of the Global Economy

State of the Indian Economy

Consumer Price Index (CPI) Inflation

Year 2014 - 15 2015 - 16 2016 - 17 % Change 5.9 4.9 5.5

Inflation within acceptable band

State of the Indian Economy

Forex Reserves

Year 2014 - 15 2015 - 16 2016 - 17 $ Bn 328.7 349.6 361 *

* As on Jan. - 2017

At all time high. Comfortable cover for 12 months of import

State of the Indian Economy

Fiscal Deficit

Year 2014 - 15 2015 - 16 2016 - 17 % of GDP 4 3.9 3.5 Fiscal discipline acknowledged by the world

State of the Indian Economy

Year 2014 - 15 2015 - 16 2016 - 17 US $ Bn 45,148 55,457 29,016 *

* Apr. to Sept. – 2016

Foreign Direct Investment (FDI)

Healthy improvement

State of the Indian Economy

Year 2014 - 15 2015 - 16 2016 - 17 FII 22,202

• 2,051

2,296 DII

• 19,263

78,687 33,392 *

Foreign Institutional Investment (FII) Domestic Institutional Investment (DII)

Source : www.moneycontrol.com

Amount in Cr.

State of the Indian Economy

Vs.

* Till : Jan. – 2017

GDP Growth trends

Year 2014 - 15 2015 - 16 2016 - 17 % Change 7.2 7.9 7.1 *

GDP Growth in stable mode – despite couple of months lost due to demonetization

* Advance Estimate

State of the Indian Economy

4 years back 3 years back 2 years back 1 year back

• Jan. – 2017

115.55 109.10 50.15 35.99 55.70

Prices of crude oil

Price of brent crude in US$

Commodity prices firming up

State of the Indian Economy

Transform, Energies and Clean India

Ease of doing business.



Integrating India with Global Economy. Preparing for GST – Biggest reform since independence. Maintain growth & foreign investments. Make India tax compliant.

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Focus of the Budget provisions

Budget 2017–18 contains 3 major reforms

Budget presented on 1st February.  Railway Budget merged with Union Budget.   Plan & Non – Plan expenditure classification removed.

Budget at a glance

Tax-to-GDP ratio compared

Targets announced in the Budget

CPI Inflation projected in the band of 2% to 6% by the year end. Inflation in December – 2016 3.4%. Fiscal deficit for the 2017 – 18 set at 3.2% of GDP. GDP Growth for the year 2017–18 projected to be between 7.2% to 7.7%.

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Defence expenditure on a decline

No major weapon purchase possible

Important announcements in the Budget 2017 – 18

100% village electrification by 1st May 2018. Allocation of Rs. 2,41,387 Cr. for Rail, Road, Shipping etc. out of total budget spending

• f
• Rs. 21,46,735 Cr.

Expenditure

• n

Railways at

• Rs. 1,31,000 of which Rs. 55,000 Cr.

is from government. Important announcements in the Budget 2017–18 – on infrastructure

  

Allocation to highways at

• Rs. 64,900 Cr.

By end of 2017 – 18 high speed broad band connectivity

• n
• ptical fiber to 1,50,000 Gram

Panchayats under Bharatnet. Integrate public sector “oil majors”.

  

Important announcements in the Budget 2017–18 – on infrastructure

Maximum amount

• f

cash donation from

• ne

source

• Rs. 2,000/=.

Issuance

• f

electoral bonds to protect the identity of the donor. Income Tax exemption to political party not available if Income Tax Return not filed in time. Important announcements in the Budget 2017–18 – on Electoral Funding

  

Foreign Investment Promotion Board (FIPB) to be abolished and liberalize FDI Policy. Target

• f

2,500 Cr. digital transactions during the year. Banks to encouraged to introduce 20 lakh Aadhar based POS terminals.

  

Important announcements in the Budget 2017–18 – ease of doing business in a transparent manner

New law soon to confiscate assets

• f

economic

• ffenders

who have fled the country. Model law on Contract Farming to be prepared & circulated to state governments. Negotiable Instrument Act to be amended to make cheque dishonour recovery faster.   

Important announcements in the Budget 2017 – 18

Changes in Income Tax Act

Income Tax exemption limit for Individual & HUF literally not raised but effectively raised to Rs. 5,00,000/= - Invitation slab of 5%. Rebate U/s 87A scaled down to Rs. 2,500/=

• n

incomes

• f
• Rs. 3,50,000/= and below.

Surcharge @ 10%

• n

taxable income exceeds Rs. 50 Lakh.

Changes in Income Tax Act

  

Tax rate of 25% for A/c Yr 2017 – 18, if the turnover / gross receipt

• f a

company is below Rs. 50 Cr. for the A/c

• Yr. 2015 – 16.

Presently no deduction U/s 80G is allowed for cash donations in excess of

• Rs. 10,000/=, this limit is reduced to
• Rs. 2,000/=.

Section 44AD of presumptive taxation applicable @ 6%

• n

sale receipts through banks instead of 8%.

  

Changes in Income Tax Act

 

Changes in the Income Tax Act

Payment of rent of Rs. 50,000/= plus by even Individual / HUF (not liable to audit) subject to TDS @ 5%. Insurance Agents can give Form No. 15 – H / 15 – G to receive insurance commission without deduction of TDS. Fees for delay in filing of returns Till 31st Dec.

• Rs. 5,000/=

31st Mar. Rs. 10,000/= Income below Rs. 5 lakh Rs. 1,000/=.



Compulsory maintance of books of A/cs U/s 44AA for all assesses not in specified profession. Present (Rs.) Proposed (Rs.) Income 1,20,000 2,50,000 Sales 10,00,000 25,00,000 Increase in threshold limit for audit for assesses

• pting

for presumptive taxation from Rs. 1cr to 2cr.

Changes in the Income Tax Act

 

Reason to believe to conduct a search no to be disclosed except to the Court. All trusts registered U/s 12AA are mandatorily required to file Return of Income. Penalty U/s. 271J of Rs. 10,000/= proposed for inaccurate report or certificate by Chartered Accountant / Valuer.

Changes in the Income Tax Act

  



Changes in the Income Tax Act

Time limit revised for – Furnishing revised return. Making assessment U/s. 143 or 144. Making assessment U/s. 147. Completion of assessment in search cases High handed provisions of Sec 197 (C) of Finance Act 2016 repealed. Newly inserted provision of Sec 153A empowers assessing of escaped incomes beyond Rs. 50 lakh for the period beyond 6 years but up to 10 years.

 

Section 80IBA – Affordable Housing Scheme

Project shall commence between 01/06/2016 to 31/03/2019. Project should be completed within 5 years

• f approval.

Where a residential unit in the housing project is allotment to an individual, no other unit shall be allotted to spouse or the minor children of that individual. To maintain separate books of account in respect of housing project.



Changes in the Income Tax Act – Real Estate Sector Features

  

Rest of India – Other than 4 metros Metro Cities (Chennai, Delhi, Kolkata or Mumbai) Location Rest of India – Other than 4 metros Within municipal limits Total Area of Project Not Less than 2000 Square Meter Not Less than 1000 Square Meter Each Residential Unit Does not Exceed 60 Square Meters Does not Exceed 30 Square Meters Project utilize % Permissible of Floor Area Ratio Not Less than 80% Not Less than 90% Built-up Area of Shop or other commercial establishment Does not exceed 3% of aggregate built-up area Does not exceed 3% of aggregate built-up area

Section 80IBA – Affordable Housing Scheme Details Changes in the Income Tax Act – Real Estate Sector

No notional income for house property held as stock in trade for 1 year from the date of certificate of completion. Shifting of base year from 1981 to 2001 for computation of capital gain. Gain on immovable property held for 24 months shall qualify for long term capital gain.

Changes in the Income Tax Act – Real Estate Sector

  

Joint Developments Agreements will not be subject to capital gains straight away. Shall be taxed

• nly
• n

completion of the project.

More

• ptions

to be available for investment U/s 54EC, beyond NHAI, REC. Set off of loss from house property in a year restricted to Rs. 2 lakhs against any

• ther income. Unabsorbed loss shall be

carried forward.



Changes in the Income Tax Act – Real Estate Sector

 

Reduced threshold limit U/s 40A(3) for cash payments from

• Rs. 20,000 to Rs. 10,000/=.

Cash payment of Capital expense above Rs. 10,000/= shall not be considered to determine actual cost of asset U/s 43(1).  

Changes in Income Tax Act – Certain transactions

Insertion of new section 269ST. Mode of undertaking transactions – From AY 2017 – 18.

• 269ST. No person shall receive an amount of three

lakh rupees or more— in aggregate from a person in a day; or in respect of a single transaction; or in respect of transactions relating to one event

• r
• ccasion

from a person,

• therwise

than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Penalty U/s 271 DA equivalent to amount received.

• Changes in Income Tax Act – Certain transactions



Compliance of certain transaction

Transaction Type TCS PAN E – Reporting Sale of any goods / service by cash above

• Rs. 2 Lakh, per

transaction during the year. Yes 1% (Double rate OR 5% whichever is higher, if PAN not quoted) Yes Yes If seller U/s 44AB Sale / Purchase of any goods / services by any mode other than cash above Rs. 2 Lac, per transaction. Yes, 1% in case of sale of motor car exceeding

• Rs. 10 Lakh

Yes

Thanks & tribute to the mentor, who left for heavenly abode on 12 – 11 -2016

Dinesh B. Kothari 1927 – 2016

Thanks to…

Rajkot Engineering Association. Press & Media. All who have participated in the budget presentation. Team ‘Ashutoshfinserv’ who takes great pain to make this comprehensive presentation in short time.

   

Disclaimer

This Presentation aims to tell the General Views and Laws related to Union Budget of India 2017. This Presentation may contain references, website links, regulations

• r other policy materials. This Information provided is only

intended to be a general summary. All information in this presentation, including charts, examples and

• ther

website references, may be used for any purpose only after Professional advice. This Presentation is the personal view of Speaker Mr. Daxesh D. Kothari on the said budget, which should not be relied or acted upon without due Professional advice

Questions ?

UNION BUDGET – 2017 - 18