Financial Asset @ 2017 - Union Budget

Union Budget 2017:

Today – 1^st February 2017, the Union Budget 2017 was presented in Parliament, which can be classified into three groups from understanding perspective:

(1)-Personal Tax Aspect (2)-Features of Budget. (3)-Which goods become cheaper / dearer.

(4)- Investment Scenario going forward

1-Personal Tax Aspect

Proposed income-tax slabs for FY 2017-18 (Assessment year 2018-19) for Age group < 60 years

Income Slab	Income Tax Rates	Education Cess	Education Cess
Upto – Rs.2,50,000	Nil	Nil	Nil
Rs.2,50,001 to Rs.5,00,000	5% of (Total Income-2,50,000)	2% of Income Tax	1% of Income Tax
Rs.5,00,001 to Rs.10,00,000	Rs.12,500+20% of (Total Income Rs.5,00,000)	2% of Income Tax	1% of Income Tax
Above Rs. Rs.10,00,000	Rs.1,12.500+30% of (Total Income – Rs.10,00,000)	2% of Income Tax	1% of Income Tax
Surcharge @ 10% for taxable income between Rs. 50 Lakhs and Rs. 1 crore and @ 15% for taxable income > Rs. 1 crore.

Age group: 60 years to < 80 years

Income Slab	Income Tax Rates	Education Cess	Education Cess
Upto- Rs.3,00,000	Nil	Nil	Nil
Rs.3,00,001 to Rs.5,00,000	5% of (Total Income-2,00,000)	2% of Income Tax	1% of Income Tax
Rs.5,00,001 to Rs.10,00,000	Rs.10000+20% of(Total income – 5,00,000)	2% of Income Tax	1% of Income Tax
Above Rs. Rs.10,00,000	Rs.1,10,000+30% of(Total income of 10,00,000)	2% of Income Tax	1% of Income Tax
Surcharge @ 10% for taxable income between Rs. 50 Lakhs and Rs. 1 crore and @ 15% for taxable income > Rs. 1 crore.

Age Group: 80 years >

Income Slab	Income Tax Rates	Education Cess	Education Cess
Upto- Rs.5,00,000	Nil	Nil	Nil
Rs.5,00,001 to Rs.10,00,000	20% of(Total income – 5,00,000)	2% of Income Tax	1% of Income Tax
Above Rs. Rs.10,00,000	Rs.1,00,000+30% of(Total income of 10,00,000)	2% of Income Tax	1% of Income Tax
Surcharge @ 10% for taxable income between Rs. 50 Lakhs and Rs. 1 crore and @ 15% for taxable income > Rs. 1 crore.

(2)-Features of Budget

Fiscal Deficit

·         Projects 2017/18 fiscal deficit at 3.2% of GDP

·         Revises 2016/17 fiscal deficit at 3.2% of GDP

·         Govt. remains committed to 20118/19 at 3% of GDP

·         Budget 2017/18 to pursue prudent fiscal management to provide financial stability

Growth

·         Nominal GDP growth seen at 11.75% year on year basis in 2017/18

·         India seen as Engine of growth

Expenditure

·         Estimates 2017/18 expenditure at 21.47 trillion Indian rupees($317.65 Billion)

·         Capital spending raised by 25.4% for 2017/18

Borrowings

·         Net market borrowing estimates 3.48 trillion rupees

·         Gross marlet borrowing seen at 6.05 trillion rupees

Inflation

·         Within 2-6 percent

Taxation & Receipts

·         2017/18 total tax revenue seen at 12.27 trillion rupees

·         2017/18 total revenue seen at 15.16 trillion rupees

·         Proposes change in long term capital gain tax in property

Foreign Investments

·         Proposes to abolish Foreign Investment Proposal Board

·         To exempt some Foreign investor from indirect transfer provisions

Infrastructure

·         Allocates 3.96 trillion rupees for infra in 2017/18

·         For transport sector allocates 2.41 trillion rupees

·         Proposes 640 billion rupees for state & national highways

Banking

·         To infuse planned 100 billion of rupees of capital into state run banks

·         Proposes to raise allowable provision for bad loans to 8.5% from 7.5%

Disinvestment

·         Total Disinvestment targeted 725 billion rupees

(3)-Which goods become cheaper / dearer.

Things which became costlier are-

·         Cigarettes, Cigars, Cheroots, Bidis,Tobacco & Pan Masala,

·         Led lamp components

·         Cashew nuts (Roasted & Salted)

·         Aluminum ores & concentrates

·         Polymer coated MS tapes used in manufacturing of optical fibres

·         Silver coins & medallions

·         Printed circuit board used in making mobile phone

Folowing are the list of items turning cheaper-

·         Solar tempered glass used in solar panels

·         Fuel cell based power generating systems

·         Wind operated energy generators

·         Vegetable tanning extracts used in making leather products

·         POS machine card & finger print reader

·         Group insurance for Defence services

(4) Investment Scenario Going Forward

Budget has all the impetus desired for economy to move forward at defined pace, though markets will see its own ups & down growing in tandem with PE around 22. Interest rates looks further softening up.

Happy Reading