Transcript Service Tax The tax of 21st Century

BUDGET ANALYSIS 2017 – 18
CMA Pradnya Chandorkar
CY & ASSOCIATES
Cost Accountants
PRADNYA CHANDORKAR
CY &ASSOCIATES
PRADNYA CHANDORKAR
CY &ASSOCIATES
1 Major reforms: Budget 2017-18
The presentation of the Budget has been
advanced to 1st February to enable the
Parliament to avoid a Vote on Account and
pass a single Appropriation Bill for
2017-18, before the close of the current
financial year, which would enable the
Ministries and Departments to
operationalise all schemes and projects,
including the new schemes, right from the
commencement of the next financial year.
PRADNYA CHANDORKAR
CY &ASSOCIATES
2 Major reforms: Budget 2017-18
Discontinuing the colonial practice
prevalent since 1924, Railways
Budget has been merged with the
Union Budget.
PRADNYA CHANDORKAR
CY &ASSOCIATES
3 Major reforms: Budget 2017-18
Finance Minister, in his Budget Speech of
2016-17 was the removal of the Plan and
Non-Plan distinction in the budget
expenditure. This has been implemented
from the Budget of 2017-18 With the
removal of this distinction it is expected that
the link between spending and outcomes
will improve and become more holistic and
focused.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Background Of the Budget

Passage of the Constitution Amendment
Bill for GST

Demonetisation

Uttar Pradesh, Uttarakhand, Goa,
Punjab and Manipur are the states
where elections will be held between
February and March 2017.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Demonetisation- Why??
• No. of persons
engaged in
oraganised sector
• Return filed by
employee under
head Salary
PRADNYA CHANDORKAR
CY &ASSOCIATES
4.2
Cr
1.74
Cr
Demonetisation- Why??
• Informal Sector
Individual
Enterprises
5.6
Cr
• Return filed by
under this
category
1.81
Cr
PRADNYA CHANDORKAR
CY &ASSOCIATES
Demonetisation- Why??
• No. of Companies
Registered under
Companies Act
• (Up to 31.04.2016)
• Companies which
has filed return
PRADNYA CHANDORKAR
CY &ASSOCIATES
13.94
Lacs
5.97
Lacs
Companies which has filed Return
Out of which 2.76 Lacs Co. have
shown losses or zero Income
2.85 lacs companies have shown
profit before tax of less than Rs 1Cr .
28,667 Companies have shown profit
below 10 Cr.
7781 have profit before tax above 10
Cr.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Facts
No. of
Individuals
who flew
Abroad for
Tourism
No. of Cars
sold in last
5 Years
1.25 Cr.
PRADNYA CHANDORKAR
CY &ASSOCIATES
2 Cr.
Old Currency deposited during 8th
November to 30th Dec 2016
Deposits
Between Rs.2 Lacs
& Rs80 Lacs
More than 80 Lacs
No. of
Accounts
1.09 Cr.
Avg. Deposit
1.48 Lacs
3.31 Cr.
PRADNYA CHANDORKAR
CY &ASSOCIATES
5.03 Lacs
Post Demonetisation
PRADNYA CHANDORKAR
CY &ASSOCIATES
PRADNYA CHANDORKAR
CY &ASSOCIATES
Budget Highlights
Realistic, High on substance
 It has created positivity in the market
 Maintaining fiscal discipline
 The government implemented what it
promised and has reached the
expectations of the families, businesses
and financial institutions.

PRADNYA CHANDORKAR
CY &ASSOCIATES
Budget Highlights
Country a tax complaint one through tax
administration
 Digital economy, which will bring more
transparency and reduce the shadow
economy.
 Stringent measures towards cash
transaction limits and political funding,
 Theme “effective governance”.

PRADNYA CHANDORKAR
CY &ASSOCIATES
Direct Tax Collection
Year
Tax Revenue In Lacs Cr.
Growth in %
2013-14 11.38
2014-15 12.45
9.4
2015-16 14.58
17
2016-17 17.04
17
PRADNYA CHANDORKAR
CY &ASSOCIATES
Key Indicators of an Indian Economy
India is now 6th largest Manufacturing
country in the world, up from the 9th rank
earlier.
 FDI increases by 36% despite global
dip in FDI inflow by 5%.
 Fiscal deficit pegged at 3.2% of GDP.
Remain committed to achieve 3% in
following year

PRADNYA CHANDORKAR
CY &ASSOCIATES
Key Indicators of an Indian Economy

India’s Current Account Deficit declined
from about 1% of GDP last year to 0.3%
of GDP in the first half of 2016-17

CPI inflation declined from 6% in July
2016 to 3.4% in December, 2016 and is
expected to remain within RBI’s
mandated range of 2% to 6%.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Growth of India against World
2015 -16
2016-17
World GDP
3.1%
3.4%
Advanced Economies
1.6%
1.9%
Emerging Economies
4.5%
4.1%
Indian GDP
IMF Estimates
7.2% & 7.8% (2017-18)
Current Account Deficit
1%
0.3%
FDI
Rs 1,07,000 Cr (1stHalf)
(1stHalf)
PRADNYA CHANDORKAR
CY &ASSOCIATES
Rs 1,45,000 Cr
TEC INDIA : Transform

Transform the quality of governance and
quality of life of our people;
PRADNYA CHANDORKAR
CY &ASSOCIATES
TEC INDIA : Energize

Energize various sections of society,
especially the youth and the vulnerable,
and enable them to unleash their true
potential.
PRADNYA CHANDORKAR
CY &ASSOCIATES
TEC INDIA : Clean

Clean the Country from the evils of
corruption, black money and
non-transparent political funding.
PRADNYA CHANDORKAR
CY &ASSOCIATES
TEC INDIA

All these measures are expected to
provide the much needed boost to rural
job creation and urban spending, which
was running low on energy post
demonetisation.

Tax transparency and better compliance.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Focus Of Budget
Agriculture
 Job Creation
 Infrastructure
 Housing for All
 Healthcare
 Sanitation and other public services

PRADNYA CHANDORKAR
CY &ASSOCIATES
Agriculture
There is a clear focus on achieving the
aspiration of doubling farm income by
2022 with due emphasis on both
productivity as well as better farm
realisations.
 10 Lakh Crore have been fixed as target
for Agricultural credit to farmers

PRADNYA CHANDORKAR
CY &ASSOCIATES
Agriculture
NAM –Electronic National Agricultural
market to be expanded to over 500
markets next fiscal & Assistance of Rs.
75 Lacs for cleaning, grading and
packaging
 The total allocation towards agriculture &
farmer welfare was increased 16% YoY

PRADNYA CHANDORKAR
CY &ASSOCIATES
Mahatma Gandhi National Rural
Employment Guarantee Act

Allocation of Rs 48,000Cr. MNREGA
in 2017-18- Highest ever. Increased
from Rs 40,000 Cr.

Participation of women in MGNREGA up
to 55%
PRADNYA CHANDORKAR
CY &ASSOCIATES
Roads & Houses

PMGSY roads work accelerated to 133
km roads/day in 2016-17 as against 73
km/day between 2011-14

Infrastructure Sector will get allocation
of Rs. 3.96 Lakh Cr highest till date
PRADNYA CHANDORKAR
CY &ASSOCIATES
Roads & Houses

One crore houses to be built for
houseless by 2019. Allocation for this
has gone to 23,000 Crore

Affordable Housing carpet area of 30 sq
mt will now apply in semi urban and rural
area, metros and periphery of metro 50
sq mt
PRADNYA CHANDORKAR
CY &ASSOCIATES
Education For Youth

Two new All India Institute of Medical
Sciences (AIIMS) were also announced
in the states of Jharkhand and Gujarat.

350 online courses have been created
under ‘Swayam’ plan for skill
strengthening of Youth
PRADNYA CHANDORKAR
CY &ASSOCIATES
Education For Youth

100 India International Skill Centres to
be launched across the country

Propose to launch skill knowledge
awareness at Rs. 4000 crore to provide
market training to youth
PRADNYA CHANDORKAR
CY &ASSOCIATES
Reaction of Anant Maheshwari,
president, Microsoft India

As India strengthens its position on the
global map, the need for skilled youth is
crucial. The budget’s focus on extending
market relevant training for the youth and
setting up 100 international skill centers
across the country, is a positive move.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Education For Youth

To set up National Testing
agency who will conduct all exams for
higher education so that CBSE can
focus on academics

Additional 5000 post graduate
medical seats annually will be created
PRADNYA CHANDORKAR
CY &ASSOCIATES
Education For Youth
Pradhan Mantri Kaushal Kendras-600
districts
 SANKALP will provide market relevant
training to 3.5 crore youth –4000 Cr
allocations
 Skill Strengthening for Industrial Value
Enhancement (STRIVE) –Rs. 2,200
crores.

PRADNYA CHANDORKAR
CY &ASSOCIATES
Govt. Plans
Govt. will list IRCTC, IRFC and IRCON
on stock exchange to increase public
accountability and unlock value of these
PSUs
 Pradhan Mantri Mudra Yojana lending
target to be doubled to Rs 2.44 lakh
crore

PRADNYA CHANDORKAR
CY &ASSOCIATES
Welfare for Children
& Women
Allocation for welfare of women and
children stepped up from Rs 1.5 lakh
crore to Rs 1.84 lakh crore
 Rs. 6,000 each will be transferred
directly to the bank accounts of pregnant
women

PRADNYA CHANDORKAR
CY &ASSOCIATES
Senior Citizen

Aadhar based smart cards with health
details for senior citizens in 2017-18

Senior citizen to get 8% p.a. assured
income in pension schemes
PRADNYA CHANDORKAR
CY &ASSOCIATES
Railway

Merger of Railway budget with general
budget is a historic step

By 2019, All Indian Railway coaches will
be fitted with Bio-Toilets
PRADNYA CHANDORKAR
CY &ASSOCIATES
Railway
Cashless Railway Bookings have moved
up to 68%
 Rail safety fund of Rs 1 lakh crore to be
created for 5 years.
 SMS based “Clean my coach”
service has been started.
 Service charges on rail tickets booked
through IRCTC to be withdrawn

PRADNYA CHANDORKAR
CY &ASSOCIATES
Reaction :Railway minister
Suresh Prabhu

Describing the budget as growth
oriented, he said, “The growth will
happen because of huge investments
that is happening. In railways, the
provision for Rs1.31 lakh crore for
capital expenditure is unprecedented in
railway history.”
PRADNYA CHANDORKAR
CY &ASSOCIATES
Digital India
125 Lakh users have adopted BHIM App
 Referral Bonus scheme for consumers
and merchant cash back scheme will be
launched for BHIM App
 The government proposes to
create payment regulatory board with
RBI

PRADNYA CHANDORKAR
CY &ASSOCIATES
Digital India

20 Lakhs Aadhar based ‘Point Of Sale’
systems to be setup in 2017

Post Offices will now be use as Passport
Offices
PRADNYA CHANDORKAR
CY &ASSOCIATES
Start Ups
Profit linked deductions for startups now
3 out of 7 years (earlier, 3 out of 5 years)
 That there is a world of talent out there
waiting in the wings to fly with ideas is a
foregone conclusion. If only the budget
had something on the Angel tax, it could
have done a world of good for the startups.

PRADNYA CHANDORKAR
CY &ASSOCIATES
Indirect Taxation
Reports had indicated that the Finance
Minister could hike service tax rate to 1618 per cent from the current 15 per cent.
 No major changes in the excise and
service tax rates ahead of the Goods
and Service Tax (GST) is a welcome
relief.

PRADNYA CHANDORKAR
CY &ASSOCIATES
Direct Taxation

Direct tax provisions focused on
widening the tax base by lowering the
tax rate for the lower income segment in
both individual as well as corporate
(MSME).
PRADNYA CHANDORKAR
CY &ASSOCIATES
Direct Taxation

Tax Reduction from 30% to 25% for
companies who have less than 50 crore
revenue. 96% companies will get benefit
of this proposal.

MAT (Minimum Alternative Tax) carry
forward to 15 years from 10 years
PRADNYA CHANDORKAR
CY &ASSOCIATES
Personal Income Tax

Personal Income Tax reduced for
individual assesses from 2.5 Lakh to 5
lakhs to 5% – Earlier it was 10% tax for
this bracket

A single one-page form for filing IT
returns for taxable income up to 5 lakh
rupees
PRADNYA CHANDORKAR
CY &ASSOCIATES
Personal Income Tax

A more gradual transition from 5% to the
highest rate, avoiding sharp increases as
at present, from 5% to 20 %.
PRADNYA CHANDORKAR
CY &ASSOCIATES
Real Estate & Housing
Capital Gain on Land & Building
36months to 24 months
 More Coverage : Carpet Area instead of
Built up Area
 Concession for land acquirement for
Capital of Andhra Pradesh

PRADNYA CHANDORKAR
CY &ASSOCIATES
Real Estate & Housing
Index Calculation: Base 2001 instead of
1981
 No Notional Income on unsold flats for
one year
 More options for investments in long
term bonds for Capital Gain

PRADNYA CHANDORKAR
CY &ASSOCIATES
Budget Reforms

A political party cannot accept more
than Rs. 2000 as donation in cash from
any single source.

Restricting cash donations : Rs. 2000

Discourage Cash Transactions: Rs.20K
to Rs.10K
PRADNYA CHANDORKAR
CY &ASSOCIATES
Budget Reforms

Tax Concession for dealers under
Presumptive Income: 8% to 6% for
digital payment

Penalty on Chartered
Accountants,Valuers & merchant
Bankers for submitting wrong information
PRADNYA CHANDORKAR
CY &ASSOCIATES
Disappointing feature
of Budget
Absence of a credible plan to ensure a
revival of bank lending.
 Commercial credit expansion by banks
has slowed down considerably, and if
personal loans are excluded, lending to
industry is actually contracting!
 There is no way the economy can get
back to 7.5% growth without a robust
revival in bank lending.

PRADNYA CHANDORKAR
CY &ASSOCIATES
Disappointing feature
of Budget

The government wants to create an ecosystem to make India a global hub for
electronics manufacturing - a tall
aspiration. However, the budget does
make an attempt towards the right
direction
PRADNYA CHANDORKAR
CY &ASSOCIATES
To Summarise
Budget 2017-18 reflects Government’s firm
commitment to substantially boost
investment in Agriculture, Social Sector,
Infrastructure and Employment Generation
on the one hand and simultaneously
sticking to the fiscal consolidation path on
the other hand.
PRADNYA CHANDORKAR
CY &ASSOCIATES
To Summarise
Government has marginally deviated
from its fiscal path, emphasis has clearly
been laid on growth by focusing more on
capital expenditure.
 We gave a new life to young. In spite of
these successes, the best is yet to come.
With a strong economy, our country can
decide its own future.

PRADNYA CHANDORKAR
CY &ASSOCIATES
HONOURING THE HONEST
PRADNYA CHANDORKAR
CY &ASSOCIATES
CY & Associates
Cost Accountants
[email protected]
 www.cycma.in
 9922867455 / 9881623822

PRADNYA CHANDORKAR
CY &ASSOCIATES