The Union Budget 2018 has been announced and it comes at a time when the country is facing a crisis from several fronts. Not only that, elections are around the corner for eight states and the Lok Sabha elections are up next year. Keeping that in mind, here’s what it means for us:
There’s no change in the income tax slabs for individuals. Instead, all salaried persons are allowed a standard deduction of Rs 40,000 on their income in lieu of transport and medical reimbursements. This comes at a cost of Rs 8,000 crore to the exchequer.
Senior citizens can find some relief in their medical bills. The health insurance premium for senior citizens have seen a rise from Rs 30,000 to Rs 50,000 per year. Given the rising costs of health care, this seems to be a good move.
In his speech, Finance Minister Arun Jaitley said that the government in the last three years had already made several positive changes in personal income tax rates. Jaitley hopes that this new move will help middle class employees in reducing their lax liabilities.
For senior citizens, there will be no taxes till Rs 3 lakh, 20 per cent on income between Rs 3 to Rs 5 lakh, and 30 per cent for Rs 10 lakh and above.
For people aged over 80 years, there are no tax slabs up to Rs 5 lakhs. There is however, a 20 percent tax above Rs 5 lakh to Rs 10 lakh, and moves 30 percent after Rs 10 lakh.
Cryptocurrencies are not considered as legal tenders. The government will encourage the use of Blockchain technology for digital payments but it is not clear if such transactions will be subjected to GST or not. The crackdown on cryptocurrencies (eg. Bitcoin) is something that a lot of countries are taking up. The number of investors in this sector is growing in India, and it is possible that they might take a hit.
The FM announced that Aadhaar will be getting a greater reach, with businesses getting their own unique IDs. If you haven’t been taking Aadhaars seriously, now is the time.
In a boost to women from a poor background, Jaitley has announced eight crore free gas connections. The government will also contribute 12 percent for the Employee's Provident Fund for three years for new employees.
During his speech, Jaitley said “There is substantial potential for domestic value addition in certain sectors, like food processing, electronics, auto components, footwear, and furniture. To further incentivise the domestic value addition and Make in India in some such sectors, I propose to increase customs duty on certain items."
That’s not exactly a lot of good news for the general consumer. Jaitley increased customs duty on cellphones from the existing 15% to 20%, some accessories have seen an increase to 15% and some parts for TVs have risen to 15%. The FM believes it will help create for jobs in the country.
But that’s not all. A whole lot of products that we use daily are likely to be costly such as toiletries, cosmetics and jewellery, apparel, furniture and toys are going to cost more.