UNION BUDGET 2017 - 18
TAX & INVESTMENT VIEW POINT
Welcome to the 12th 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
1
2
3
4
Country
Russian Ruble
Brazilian Real
Canadian Dollar
US Dollar
Change in %
11.49
Rank
11
11.21
0.12
0.00
12, 13
5
Saudi Arabian Riyal
0.00
6
South Korean Won
-0.24
7
Japanese Yen
-0.53
8
Australian Dollar
-1.18
9
Indonesian Rupiah
-1.40
10
Indian Rupee
-1.71
Country
Swiss Franc
Euro
Germany, Italy,
Spain,
14, 15,
Netherlands ,
16
France
Chinese Yuan
17
Renminbi
British Pound
18
Mexican Peso
19
Turkish Lira
20
India stands out as a bright spot
Changes between 01/04/2016 to 31/01/2017
Change in %
-3.10
-5.42
-6.30
-12.88
-20.03
-33.73
* Source : www.x-rates.com
State of the Global Economy
Change in Indices
Rank
Country
1
2
3
4
Brazil - Bovespa
Russia - MICEX
Japan - NIKKEI 225
Germany - DAX
Saudi Arabia - Tadawul All
5
Share
6
U K - FTSE 100
7 Canada - S&P/TSX Composite
8
Australia - S&P/ASX 200
9
USA - Dow
10
France - CAC 40
Rank
Country
11
12
Netherlands - AEX
India - Sensex
Change
in %
9.72%
9.44%
13
Indonesia - IDX
9.31%
14
Spain - IBEX
8.29%
15.93%
15
Swizerland - SMI
7.85%
15.51%
14.48%
12.43%
11.64%
9.87%
16
17
18
19
China - Shanghai Composite
Turkey - BIST 100
Korea - KOSPI
Italy - FTSE MIB
5.00%
4.78%
4.76%
4.58%
20
Mexico - IPC
2.04%
Change
in %
27.91%
19.42%
17.80%
17.77%
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
1
GDP Growth
7.30
2
Country
India
China
3
4
5
6
7
8
9
10
Indonesia
Spain
Netherlands
Korea
United Knigdom
Mexico
United States
Australia
5.02
3.00
2.40
2.30
2.20
2.20
1.90
1.80
6.80
Rank
11
12
13
14
15
16
17
18
19
20
Country
Germany
Canada
Swizerland
Japan
France
Italy
Saudi Arabia
Russia
Turkey
Brazil
GDP Growth
1.50
1.30
1.30
1.10
1.10
1.00
0.90
(0.40)
(1.80)
(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
back
0.12 %
3 years
back
0.07 %
2 years
back
0.12 %
1 year
back
0.38 %
Jan – 2017
(Present)
0.56 %
State of the Indian Economy
State of the Indian Economy
Consumer Price Index (CPI) Inflation
Year
2014 - 15
% Change
5.9
2015 - 16 2016 - 17
4.9
5.5
Inflation within acceptable band
State of the Indian Economy
Forex Reserves
Year
$ Bn
2014 - 15
328.7
2015 - 16 2016 - 17
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
% of GDP
4
2015 - 16 2016 - 17
3.9
3.5
Fiscal discipline acknowledged by the world
State of the Indian Economy
Foreign Direct Investment (FDI)
Year
US $ Bn
2014 - 15
45,148
2015 - 16 2016 - 17
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
FII
DII
* Till : Jan. – 2017
2014 - 15
22,202
- 19,263
2015 - 16 2016 - 17
- 2,051
2,296
78,687
33,392 *
Source : www.moneycontrol.com
State of the Indian Economy
GDP Growth trends
Year
2014 - 15
% Change
7.2
2015 - 16 2016 - 17
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
st February.
Budget
presented
on
1

 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
1st 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
majors”.
public
sector
“oil
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
terminals.
based
POS
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
Rs. 3,50,000/= and below.
of
 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.
in filing of returns
 Fees for delay
st
Till 31 Dec. Rs. 5,000/=
31st 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.)
Income
1,20,000
Sales
10,00,000
Proposed (Rs.)
2,50,000
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.
Changes in the Income Tax Act – Real Estate Sector
Section 80IBA – Affordable Housing Scheme
Features
 Project shall commence between 01/06/2016
to 31/03/2019.
 Project should be completed within 5 years
of approval.
 Where a residential unit in the housing
project is allotment to an individual, no other
unit shall be allotted to spouse or the minor
children of that individual.
 To maintain separate books of account in
respect of housing project.
Changes in the Income Tax Act – Real Estate Sector
Section 80IBA – Affordable Housing Scheme
Details
Rest of India – Other than 4
metros
Rest of India – Other than 4
metros
Not Less than 2000 Square
Meter
Does not Exceed 60 Square
Meters
Not Less than 1000 Square
Meter
Does not Exceed 30 Square
Meters
Project utilize % Permissible of
Floor Area Ratio
Not Less than 80%
Not Less than 90%
Built-up Area of Shop or other
commercial establishment
Does not exceed 3% of
aggregate
built-up area
Does not exceed 3% of
aggregate built-up area
Location
Total Area of Project
Each Residential Unit
Metro Cities (Chennai,
Delhi, Kolkata or Mumbai)
Within municipal limits
Changes in the Income Tax Act – Real Estate Sector
 No notional income for house
property held as stock in trade for 1
year from the date of certificate of
completion.
 Shifting of base year from 1981 to
2001 for computation of capital
gain.
 Gain on immovable property held
for 24 months shall qualify for long
term capital gain.
Changes in the Income Tax Act – Real Estate Sector
 Joint Developments Agreements will
not be subject to capital gains straight
away.
Shall be taxed only on
completion of the project.
 More options to be available for
investment U/s 54EC, beyond NHAI,
REC.
 Set off of loss from house property in a
year restricted to Rs. 2 lakhs against any
other income. Unabsorbed loss shall be
carried forward.
Changes in Income Tax Act – Certain transactions
 Reduced threshold limit U/s
40A(3) for cash payments from
Rs. 20,000 to Rs. 10,000/=.
 Cash payment of Capital expense
above Rs. 10,000/= shall not be
considered to determine actual
cost of asset U/s 43(1).
Changes in Income Tax Act – Certain transactions
 Insertion
of new section 269ST.
Mode of
undertaking transactions – From AY 2017 – 18.
269ST. No person shall receive an amount of three
lakh rupees or more—
• in aggregate from a person in a day; or
• in respect of a single transaction; or
• in respect of transactions relating to one
event or occasion from a person,
otherwise than by an account payee
cheque or an account payee bank draft or
use of electronic clearing system through
a bank account:
Penalty U/s 271 DA equivalent to amount received.
Compliance of certain transaction
Transaction Type
Sale of any goods /
service by cash above
Rs. 2 Lakh, per
transaction during the
year.
Sale / Purchase of any
goods / services by any
mode other than cash
above Rs. 2 Lac, per
transaction.
TCS
Yes
1%
(Double rate OR
5% whichever is
higher, if PAN
not quoted)
Yes,
1% in case of
sale of motor
car exceeding
Rs. 10 Lakh
PAN
E – Reporting
Yes
Yes
If seller
U/s 44AB
Yes
----
Dinesh B. Kothari
1927 – 2016
Thanks &
tribute to the
mentor, who
left for
heavenly
abode on
12 – 11 -2016
Thanks to…
 Rajkot Engineering Association.
 Press & Media.
 All who have participated in the
budget presentation.
 Team ‘Ashutoshfinserv’ who takes
great
pain
to
make
this
comprehensive presentation in short
time.
Disclaimer
This Presentation aims to tell the General Views and Laws related to
Union Budget of India 2017.
This Presentation may contain references, website links, regulations
or other policy materials. This Information provided is only
intended to be a general summary. All information in this
presentation, including charts, examples and other website
references, may be used for any purpose only after Professional
advice.
This Presentation is the personal view of Speaker Mr. Daxesh D.
Kothari on the said budget, which should not be relied or acted
upon without due Professional advice
Questions ?
UNION BUDGET – 2017 - 18