Budget Highlights 2018
Direct Tax:
No change in Tax Rate. All persons including individuals, HUF, Firms and Companies to pay same tax . However Education cess is being increased from 3 to 4 % to be known as Education and Health cess.
However for Domestic Companies having total turnover or gross receipts not exceeding Rs 250 crores in Financial year 2016-17 shall be liable to pay tax at 25% as against present ceiling of Rs 50 crore in Financial year 2015-16.
Long term Capital gain exemption under section 10(38) in respect of listed STT paid shares being withdrawn.
However capital gain up to 31.1.2018 shall not be taxed as cost of acquisition will be taken as Fair Market Value as on 31.1.2018.
Tax on STT paid long term capital Gain on listed stocks / Equity Oriented Mutual Fund will be 10% under Section 112A. Further such tax will be liable for TDS. Further, Distribution of dividend by equity oriented mutual fund is to be taxed at 10%
Standard Deduction of Rs 40,000 for salaried employees. However benefit of transport allowance of Rs 19,200 and Medical Reimbursement of Rs 15,000 under Section 17(2) are being withdrawn. Thus net benefit to salaries class only Rs 5,800
Rs 50,000 additional benefit to senior citizens for investment in mediclaim u/s 80D.
Critical illness expenditure based tax exemption increased to Rs 1 lakh per year for senior citizens u/s 80DDB.
Provision of Section 43CA, 50C and 56(2)(x) being amended to allow 5% of sale consideration in variation vis a vis stamp duty value. On account of location, disadvantage etc.
Provision of section 40(ia) and 40A(3) and 40A(3A)are being made applicable to Charitable Trust. Hence expenditure incurred without deduction of tax and in cash will not be eligible as application of income under section 10(23C) and section 11(1)(a).
To mandate that in order to avail benefit of any deduction under Chapter VIA-C, the persons have to file return within due date specified under section 139(1) of the Act.
Agriculture Commodity Derivates income /loss also not to be considered as speculative under section 43(5).
Income Computation and Disclosure Standards(ICDS) being given statutory backing in view of decision of Delhi High Court decision.
Marked to market loss computed as per ICDS to be allowed under section 36.
Gain or loss in Foreign Exchange as per ICDS to be allowed under new section 43AA.
Construction Contract income to be computed on percentage completion method as per ICDS.
Valuation of Inventory including Securities to be as per ICDS.
Interest on compensation, enhanced compensation. Claim or enhancement claim and subsidy, incentives to be taxed in the year of receipt only as per new Section 145B.
Conversion of stock in trade to capital asset to be charged as business income in the year of conversion on Fair Market value on the date of conversion.
54EC benefit of investment in Bonds to be restricted to Capital gain on land and building only. Further period of holding being increased from 3 years to 5 years.
PAN to be obtained by all entities including HUF other than individuals in case aggregate of financial transaction in a year is Rs 2,50,000 or more. All directors, partners, members of such entities also to obtain PAN.
All companies irrespective of income to file return and in case it is not filed, such companies will be liable for prosecution irrespective of the fact weather it has tax liability of Rs 3,000 or not.
To roll out the E-assessment across the country, which will transform the age-old assessment procedure of the income tax department and the manner in which they interact with taxpayers and other stakeholders.
No adjustment under section 143(1) while processing on account of mismatch with 26AS and 16A.
Deemed dividend to be taxed in the hands of the company itself as Dividend Distribution of tax @ 30%.
Penalty for non filing financial return as required under section 285BA being increased to Rs 500 per day.
Indirect Tax:
CHANGE IN RATE STRUCTURE OF CUSTOM DUTY
| S.no. | Particular | Existing Custom Duty | Proposed Custom Duty(Budget 2018) |
| 1 | Cellular mobile phones | 15% | 20% |
| 2 | Specified parts and accessoriesof cellular mobile phones | 7.5%/10% | 15% |
| 3 | Cashew nuts in shell | 5% | 2.5% |
| 4 | Television | 10% | 15% |
| 5 | Solar tempered glass or solartempered [anti-reflective coated]
glass for manufacture of solar cells /panels/modules |
5% | Nil |
| 6 | Silk Fabrics | 10% | 20% |
| 7 | Footwear | 10% | 20% |
| 8 | Imitation Jewellery | 15% | 20% |
| 9 | Smart watches/wearable devices | 10% | 20% |
| 10 | LCD/LED/OLED panels andother parts of LCD/LED/OLED
TVs |
7.5%/10% | 15% |
| 11 | Abolition of Education Cess andSecondary and Higher
Education Cess on imported Goods |
3% of the aggregate duties of Customs[2% + 1%] | Nil |
| 12 | Levy of Social WelfareSurcharge on imported goods |
— |
10% of the aggregate duties of customs |
CHANGE IN RATE STRUCTURE OF EXCISE DUTY
| S.no. | Particular | Existing Excise Duty | Proposed Excise Duty (Budget 2018) |
| 1 | Levy of Road and Infrastructure Cess on motor spirit commonly known as petrol and high speed diesel oil |
— |
Rs. 8 per Litre |
| 2 | Abolition of Additional Duty of Excise [Road Cess] on motor spirit commonly known as petrol and high speed diesel oil | Rs. 6 per Litre | Nil |
| 3 | Basic excise duty on :(i) Unbranded Petrol
(ii) Branded petrol (iii) Unbranded diesel (iv) Branded diesel |
Rs. 6.48 per litre
Rs. 7.66 per litre Rs. 8.33 per litre Rs. 10.69 per litre |
Rs. 4.48 per litre
Rs. 5.66 per litre Rs. 6.33 per litre Rs. 8.69 per litre |
| 4 | Infrastructure Cess on petrol and diesel manufactured in and cleared from 4 specified refineries located in the North-East |
— |
Rs. 4 per litre |
- Ø To change the name of Central Board of Excise and Customs [CBEC] to Central Board of Indirect Taxes and Customs (CBIC).