Budget 2018 - Hits And Misses
Business Advisor|February 10, 2018

V. K. Subramani

Budget 2018 - Hits And Misses

The Budget 2018 aroused great expectations among the taxpayers by way of relief from tax particularly in the context of Income-tax Act, 1961. While the tax collections have shown buoyancy, the Government did not take measures to boost it further. Instead, it has announced certain welfare measures such as medical assistance to huge population in one go without having a proper logistics for launching such a massive scheme. Having collected huge tax by way of income-tax and GST, it is prudent and justified to channelise the resources to benefit the lower strata of the society but such measure requires proper planning and seamless execution. Else, it would meet the same fiasco of demonetisation and hiccups in the initial stages of GST.

This write-up discusses significant amendments proposed in the Income-tax Act, 1961.

1. Increase in cess: There is no increase or decrease of tax liability for personal taxpayers as the basic exemption limit has been retained without any change. However, with increase in cess from 3% to 4%, there will be a little extra tax outgo on the taxpayers.

2. Corporate tax rate: The corporate tax rate has been reduced to 25% for companies having turnover up to Rs 250 crore. This reduction in tax rate in conjunction with taxation of long-term capital gains tax on sale of listed shares seems to be somewhat balanced. However, nonreduction of tax rate for partnership firms, AOPs and personal taxpayers (for whom the maximum tax rate of 30% is applicable) seems to be unjustified.

This story is from the February 10, 2018 edition of Business Advisor.

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This story is from the February 10, 2018 edition of Business Advisor.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.