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

V. K. Subramani

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.

3. Deemed dividend: There is some controversy as regards taxation of deemed dividend. In the case of companies in which the public are not substantially interested, advancing money to shareholder having more than 10% stake in the company was taxable as deemed dividend in the hands of recipient shareholder. There are lots of controversies on interpreting section 2(22)(e). The Finance Bill, 2018 proposes to shift the burden of tax on the company by fixing the dividend distribution tax rate at 30%. Again the very definition of “deemed dividend” when plagued with so much of controversy, the litigation will now shift to corporate arena from shareholders.

Continue reading your story on the app

Continue reading your story in the magazine


Painting Through Pandemic

Vibrant illustrator Tania Yakunova talks about her life as an artist in quarantine and shares her hopes and fears as we all wrestle through this pandemic.

4 mins read
Creative Gaga
Issue 50

The Party of Mandela Is at Odds With Itself

South Africa’s president is under pressure for alleged graft.

4 mins read
Bloomberg Businessweek
March 28 - April 3, 2016

What It's Like to Run a Company in the Most Dangerous Places on Earth

Inside the deadly, controversial, highly secretive, and crucially important private warfare waged by Patriot Group.

10+ mins read
March 2016

The Elusive Maggie Thatcher

Why distorting Mrs. T. has been a popular literary pastime.  

7 mins read
The Atlantic
March 2016

The Front-Runner Fallacy

Early presidential polls have tended to be wildly off-target. There’s no reason to think this time is different.

8 mins read
The Atlantic
December 2015

Narendra Modi's Enormous Ambitions

"Obsession with self and image, combined with staggering ambition, defines Modi, a veteran politician says. After 25 years, it's really all he knows about the man."

10+ mins read
Bloomberg Markets
September 2015

UK grants additional funds to vaccines manufacturing centre

The Vaccines Manufacturing and Innovation Centre (VMIC) has been granted an additional £47.6 million by the UK government to support the expansion and acceleration of the programme.

1 min read
BioSpectrum Asia
April 2021

आप के पीछे नौकरी भागे

सरकारी नौकरी का आकर्षण पहले भी था और आज भी पढ़ेलिखे नौजवान सरकारी नौकरी के पीछे जीतोड़ मेहनत करते हैं लेकिन अकसर निराशा हाथ लगती है. ऐसे में स्वरोजगार और प्राइवेट जौब के औप्शन बेहतर कह सकते हैं.

1 min read
April First 2021

Vaccine passport opponents have a right...to be wrong

IT is vital in a democracy to have vibrant debate.

4 mins read
Daily Express
April 06, 2021


Curriculum, poor infrastructure and unimpressive service in public schools are pushing parents to enrol their wards in the private sector schools. This is despite the fact that Jammu and Kashmir invests more than Rs 12000 crore in the education sector and has the best human resource. Now teachers of a south Kashmir government school are investing their blood and sweat to undo the trend by reimagining their school, Saifullah Bashir and Shakir Ashraf reports

10+ mins read
Kashmir Life
March 28, 2021