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

UNION BUDGET 2017 - 18 TAX & INVESTMENT VIEW POINT

Welcome to the 12 th Budget Presentation

State of the Global Economy

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 % Rank Country Change in % Russian Ruble 11.49 Swiss Franc -3.10 11 1 2 Euro Brazilian Real 11.21 3 Canadian Dollar 12, 13 0.12 Germany, Italy, 4 US Dollar 0.00 -5.42 Spain, 14, 15, 5 Saudi Arabian Riyal 0.00 Netherlands , 16 France 6 South Korean Won -0.24 Chinese Yuan 7 Japanese Yen -0.53 -6.30 17 Renminbi 8 Australian Dollar -1.18 British Pound -12.88 18 9 Indonesian Rupiah -1.40 Mexican Peso -20.03 19 10 Indian Rupee -1.71 Turkish Lira -33.73 20 India stands out as a bright spot Changes between 01/04/2016 to 31/01/2017 * Source : www.x-rates.com

State of the Global Economy Change in Indices Change Change Rank Country Rank Country in % in % 27.91% 11 Netherlands - AEX 9.72% 1 Brazil - Bovespa 12 2 19.42% India - Sensex 9.44% Russia - MICEX 3 17.80% 13 Indonesia - IDX 9.31% Japan - NIKKEI 225 4 17.77% 14 Spain - IBEX 8.29% Germany - DAX Saudi Arabia - Tadawul All 15 Swizerland - SMI 7.85% 5 15.93% Share 16 China - Shanghai Composite 5.00% 6 15.51% U K - FTSE 100 17 Turkey - BIST 100 4.78% 7 Canada - S&P/TSX Composite 14.48% 18 Korea - KOSPI 4.76% 8 12.43% Australia - S&P/ASX 200 19 Italy - FTSE MIB 4.58% 9 11.64% USA - Dow 20 Mexico - IPC 2.04% 10 9.87% France - CAC 40 India stands out as a bright spot Changes between 01/04/2016 to 31/01/2017 * Source : www.investing.com

State of the Global Economy Growth of the top 20 economies of the world Rank Country GDP Growth Rank Country GDP Growth 1 India 7.30 11 Germany 1.50 China 12 Canada 1.30 2 6.80 Indonesia 13 Swizerland 1.30 3 5.02 Spain 14 Japan 1.10 4 3.00 Netherlands 15 France 1.10 2.40 5 Korea 16 Italy 1.00 6 2.30 United Knigdom Saudi Arabia 0.90 7 2.20 17 Mexico Russia (0.40) 8 2.20 18 United States 9 1.90 19 Turkey (1.80) 10 Australia 1.80 20 Brazil (2.90) India stands out as a bright spot GDP for the year 2016 * Source : www.tradingeconomics.com

State of the Global Economy Increase in the policy rates of US Federal Reserve Lower Capital inflows.  Higher outflows.  5 years 3 years 2 years 1 year Jan – 2017 back back back back (Present) 0.12 % 0.07 % 0.12 % 0.38 % 0.56 %

State of the Indian 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 Foreign Direct Investment (FDI) Year 2014 - 15 2015 - 16 2016 - 17 US $ Bn 45,148 55,457 29,016 * * Apr. to Sept. – 2016 Healthy improvement

State of the Indian Economy Foreign Institutional Investment (FII) Vs. Domestic Institutional Investment (DII) Amount in Cr. Year 2014 - 15 2015 - 16 2016 - 17 FII 22,202 - 2,051 2,296 DII - 19,263 78,687 33,392 * Source : www.moneycontrol.com * Till : Jan. – 2017

State of the Indian Economy GDP Growth trends Year 2014 - 15 2015 - 16 2016 - 17 % Change 7.2 7.9 7.1 * * Advance Estimate GDP Growth in stable mode – despite couple of months lost due to demonetization

State of the Indian Economy Commodity prices firming up Prices of crude oil 4 years 3 years 2 years 1 year Jan. – 2017 back back back back 115.55 109.10 50.15 35.99 55.70 Price of brent crude in US$

Focus of the Budget provisions 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. 

Budget 2017 – 18 contains 3 major reforms Budget presented on 1 st 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%.

Important announcements in the Budget 2017 – 18 Defence expenditure on a decline No major weapon purchase possible

Important announcements in the Budget 2017 – 18 – on infrastructure 100% village electrification by  1 st May 2018. Allocation of Rs. 2,41,387 Cr. for  Rail, Road, Shipping etc. out of total budget spending of Rs. 21,46,735 Cr. Expenditure on 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 on optical fiber to 1,50,000 Gram Panchayats under Bharatnet.  Integrate public sector “oil majors” .

Important announcements in the Budget 2017 – 18 – on Electoral Funding Maximum amount of cash  donation from one source Rs. 2,000/=.  Issuance of 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 – ease of doing business in a transparent manner  Foreign Investment Promotion Board (FIPB) to be abolished and liberalize FDI Policy. Target of 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  New law soon to confiscate assets of economic offenders 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.

Changes in Income Tax Act

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/= on incomes of Rs. 3,50,000/= and below.  Surcharge @ 10% on 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 of 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% on sale receipts through banks instead of 8%.

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

Changes in the Income Tax Act 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 opting 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  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.