In his last Budget before the general elections, Finance Minister Arun Jaitley on Thursday unveiled a slew of measures for agriculture as well as the rural sector, and announced a new health insurance scheme for the poor, but provided little relief to middle class households.
With chaotic implementation of the Goods and Services Tax, and demonetisation causing distress in the economy, Jaitley announced massive spending on rural and urban infrastructure and lower tax rates for small and medium enterprises.
While continuing the 10-15 percent surcharge on the super- rich, he raised the health and education cess, levied on all taxable income, to 4 percent from 3 percent at present.
Keeping the income tax rates and slabs unchanged, he introduced a Rs 40,000 Standard Deduction for salaried employees and pensioners in lieu of the present exemption in respect of transport and medical expenses.
Presently, no tax is applicable on Rs 19,200 of transport allowance and medical expenditure of up to Rs 15,000. This has now been subsumed into the new Standard Deduction of Rs 40,000, which may mean very little benefit in tax saving considering that health and education cess has gone up.
Senior citizens will get higher exemptions on income from interest on bank and post office deposits, health insurance premium and critical illness expense.
Jaitley however made import of a host of products – from cellphones to perfumes and toiletry, from watches to parts of automobiles, sunglasses to truck and bus tyres, footwear to diamonds and edible oils to fruit juices – costly by raising customs duty.
The Budget Breakdown
Confused about the sector-wise breakdown of the Union Budget 2018-19? We've got you covered!
- Defence: 9%
- Subsidies: 9%
- Finance Commission and other transfers: 8%
- States' share of taxes and duties: 24%
- Pensions: 5%
- Other expenditure: 8%
- Centrally Sponsored Schemes: 9%
- Interest Payments: 18%
- Central Sector Schemes: 10%
Defence outlay has been raised to Rs 2.82 lakh crore in 2018-19 from Rs 2.67 lakh crore in the last year.
Food subsidy will also rise to Rs 1.69 lakh crore in 2018-19 from Rs 1.4 lakh crore previously.
Centrally Sponsored Schemes include:
- Pradhan Mantri Awas Yojna
- National Health Mission
- Swachh Bharat Mission
- Mahatma Gandhi National Rural Employment Guarantee Programme etc.
- Central Sector Schemes include
- Namami Gange-National Ganga Plan
- Recapitalization of Public Sector Banks
- Stand-Up India, Khelo India etc
Apart from the above, the total allocation on health, education and social security has gone up from Rs 1.22 lakh crore to Rs 1.38 lakh crore
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