Yojana March 2018 Summary : Union Budget – (Part - 3) (Download PDF)

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Inter-Sectoral Issues - More airports will reduce the catchment per airport, reducing frequency of service and thus putting the overall viability in question. For example, Hubbali and Belagavi, less than 100 km apart (takes less than 2 hours by road) with excellent road connectivity but still wish to have modern airports with just a couple of flights a day. In case of Bangalore, and other metro cities, there are places which would take more than 2 hours to reach airport. In hilly areas, airports closer to one another may still be okay.

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Union Budget: Yojana March 2018 Summary (In English)

Dr. Manishika Jain explains Yojana March 2018: Union Budget

  • Another inter-sectoral domain is the intermodal connectivity between metro and railways. Bengaluru and Delhi are two such examples where such connectivity has been compromised, leading to poor service quality for customer transfer, and resulting in reduced demand.
  • 👌 The government has announced that the policy would be to convert all road vehicles to electric vehicles by 2030, the industry is not fully in agreement with the government, both in terms of announced timeline and focus on electric vehicles over hybrids.

Blackboard to Digital Board

  • The emphasis on education was on quality. The instruments being considered are
  1. Technology to be the driver for the movement from blackboard to digital board
  2. The government to take a holistic view of education seeing it as a continuum from primary to secondary.
  • The announcement was made in the last Committee meeting Operational Digital Board (CABE)
  • A concept has been floated by Ministry of Human Resource Development regarding the merger of Sarva Shiksha Abhiyan (SSA) and Rashtriya Madhyamik Shiksha Abhiyan (RMSA).
  • A district wise strategy is being developed for improving quality based on National Achievement Survey and for enhancing teacher education and training. Other initiatives like establishing of schools and research centres with more than 1 lakh crores for more than 4 years. The measures are not matched with commensurate financial allocations. The budget for the schools may be done through tribal affairs budget.
  • Investment in teachers and their training would have a direct impact on quality in the classroom. District level achievement test can form the baseline from where regular tracking of learning can be planned.
  • Increase of Rs. 3000 crores to National Education Mission does not seem adequate for the ambitious plans. Operation Digital Board would require a massive upgrade of basic infrastructure as most of the schools lack basic infrastructures like electricity connection, functioning computer.
  • There are almost 6 million children who are still out of school, implying that getting them to school would mean further investment in infrastructure. Digital board mission cannot take off fully till electrification mission is done completely.
  • Budget for Madan Mohan Malviya for Teachers and Training has remained stagnant at 120 crores. The budget was increased last year for appointment of language teachers. There is a huge shortage of teachers, especially language teachers in tribal areas. The teacher training is very important but it should not come at cost of teacher appointments.
  • 11.5 % of primary and 7.5 % of all schools are single teacher schools. The average teacher in an elementary government school is 4.3 much below one teacher per grade.
  • The distribution of responsibility (for education) between MHRD or state education departments and the Ministries of Departments of Social Justice and Tribal Welfare has been criticised for adopting dual system of administration.
  • Tribal Affairs Department lacks expertise in work education, merging of education schemes extend to all schools may be drawback for applying the schemes of education through Tribal Affairs Department. The schools to be setup should not receive the pariah treatment received by the Ashram schools set up by Tribal Affairs Department.
  • Bringing all schools under same administration and jurisdiction of MHRD and state education departments would help the schemes. A lot will depend on the design of merged plan.
  • One lakh crores over the next four years for research and innovation is a welcome move. Rs. 45 crore increase would imply that in next 3 years the budget will need to expand hugely to keep up the promise.
  • National Achievement Survey forms the basis of improving learning outcomes does not have budgetary implications. Adopting a district level strategy for improving learning levels will require investment in services that could monitor and track learning. There are some financial implications for this exercise.
  • The thrust on technology as the driver of quality improvements in education is also shift that needs further unpacking in the light not just for shortfalls in enabling infrastructure but also in terms of implications for teaching practices. Announcements in the budget has raised many questions like is the government looking for quick fix solutions and shying away from addressing the larger issue of implementation failure that have long been acknowledged as the case of poor quality and falling learning levels.

Relief for the Elderly

  • Adequate provisions to be made for a sizeable population (about 9%) and rapidly increasing venerable group i. e. India’s elderly group (age > 60)
  • There were 70.6 million in 2001 and expected to be 173 million in 2016. A sizable percentage of elderly India belong to vulnerable class by different critical economic/social criteria. Antyodaya households, 23 % not owning any assets, 43 % with no income, 50 % financially fully dependent, 27 % SC/ST and one third house-hold with monthly per capita expenditure less than Rs. 1000.

Benefits for Taxpayer Senior Citizens

Senior citizens are likely to benefit from the following provisions

  • The exemption limit for interest income is raised to Rs. 50,000 from the existing limit of Rs. 10,000 under section 80TTA. The exemption is not only from bank deposits in savings account and savings in Post Office Schemes but also for interest income from fixed deposits in banks. As per BKPAI survey, 21 % rural elderly and 28 % urban elderly have savings in banks and post offices, very few have shares and bonds.

  • Limit for the deduction on Medical Insurance Premium is raised to Rs. 50,000 from the existing Rs. 30,000 under section 80D.

  • Relief for senior citizens suffering from critical illness as exemption limit for medical expenditure for specific critical illness is raised to Rs. one lakh from the existing Rs. 60,000 for senior citizens and Rs. 80,00 for 80 + aged citizens.

  • The budget also reintroduced standard deduction of Rs. 40,000 from the salaried income (in place of present deduction of travel allowance and medical allowance for salaried people), the pensioners senior citizens may benefit from the provision, as senior citizens in the lowest slab will not be required to pay income tax at all, thus increasing their savings, incentives for taking larger medical insurance cover and also incentive for keeping more fixed deposits in banks.

📝 Pradhan Mantri Vayavandana Yojna

  • The scheme started in May 2017 only for one year but now it is extended upto May 2020. The investment limit is doubled to 15 lakhs from 7.5 lakhs.
  • Under this scheme (operated by LIC), for persons above age 60, on survival of the Pensioner during the policy term of 10 years, pension in arrears shall be payable. On death of the Pensioner, during the policy term of 10 years, the purchase price will be refunded to the beneficiary. Purchase price along with final pension instalment shall be payable to the pensioner at the end of the policy term (10 years).
  • Overall Impact-Limited
  • The provisions though important for certain section of senior citizens, but is confined to a small percent of elderly. Majority of rural elderly come from agricultural backgrounds and will not benefit from income tax provisions. BKPAI survey shows that only 10 % of rural elderly and 16 % urban elderly receive pension. 42 % of rural elderly and 47 % of urban elderly have no income at all. Only 12.5 % of rural elderly and 17 % of urban elderly have annual income of Rs. 50,000 and above.

National Health Protection Scheme

Aayushman Yojana—the huge state funded National Health Protection Scheme is for all BPL families and not specific for the elderly. As per BKPAI survey, more than 50 % of elderly have reported that they donot have good health, 1/5threported of poor health, 13 % reported acute morbidity, 8 % need assistance and 60 % reported having partial or full vision disability, and one fourth reported full or partial memory disability or walking disability.

Aayushman Bharat to replace Rashtriya Swasthya Bima Yojna (RSBY), under which Rs. 1000 crores are provided to cover 18 crore people from 3.6 BPL families for treatment of diseases. This budget allocated Rs. 2000 crores and the allocation to go upto 12,000 crores by the end of the year and the funding would come from 1 % cess (4 % on education and health cess in place of 3 % education cess. )

The states to share 40 % of the expenditure on this scheme by providing additional Rs. 8000 crore.

Constraints and Limitations

The reaction about the world’s largest scheme ranges from perfectly doable to world’s largest mess.

The major criticisms are

  • Inadequate Funding: the government allocated Rs. 2000 crore, but it is expected the scheme to cost Rs. 30000 crores.

  • It is doubtful that with the limited resources, will the states be able to provide their 40 % share

  • Not enough clarity regarding the implementation mechanisms but it appears states will be given an option to choose implementation through trust or insurance agencies. The other major issue is if the annual instalment of Rs. 1082, per registered family, be sufficient to provide the services.

  • The scheme did not help reduce the out of pocket expenditure incurred by families

  • The scheme provides hospitalization expenses but more than 2/3rd of the treatment expenses incurred by families are other than hospital expenses.

  • Only 10 % of elderly were hospitalized in last one year according to BKPAI survey.

  • Often elderly are hospitalized only at the last stage. The new scheme can act as incentive for timely hospitalization of the elderly.

  • Shortage of medical manpower

Strengthening of health infrastructure especially in remote areas is crucial in this respect. The provisions in the budget like wellness centres, new medical colleges and nutrition diet for TB patients is certainly an important step to help the elderly.

The government need to increase expenditure in the health sector and increase public-private partnership in this field. Bringing health sector on to the centre stage in the budget, to go long way towards improving the quality of life for elderly in India.

Under UNFPA project on “Building a Knowledge Base on Population Ageing in India (BKPAI), a survey of 9852 elderly from 8329 sample household was carried out in states like Himachal Pradesh, Kerala, Maharashtra, Odisha, Punjab, Tamil Nadu and West Bengal in 2011.

Women Empowerment and the Budget 2018 - 19

The budget announced is for poor, farmers, women and marginalized. The government is moving from ease of doing business to ease of living for the poor and marginalized. It is pro-reforms and progressive.

The government and non-government sectors are pushing ahead with programs aimed at

  • Imparting education to women

  • Giving them better health care

  • Providing them with means of livelihood

  • Opportunities to participate in the decision making process at homes and in the society

Special attention is being paid to improve the lot of girl child, giving her better opportunities for living a life of fulfillment.

The 73rd amendment to the constitution in 1993 was a major milestone in this direction. The impact of reserving one third of seats for women in Panchayati Raj Institutions has been fruitful and has empowered women both politically and socially.

👌 Out of 200,000 panchayat representatives in India, 75,000 are women, the largest number of elected women in the world.

Government planning to introduce Women’s Reservation Bill, which seek to reserve one third of all seats in Lok Sabha and State Legislative Assemblies.

The real challenge is to ensure that women are involved in decision making process at home and society. The challenge will be to develop their capacity so that they can perform their role properly.

Few of the shackles that remain tightly around women’s feet are

  • Female foeticide

  • Gender bias in rich states like Punjab, Delhi and Haryana (sparing neither the villager nor the urban sophisticate)

  • Sexual assaults

  • Dowry harassment and deaths

  • Biased healthcare

  • Low literacy

  • Discrimination at workplace and subjugation at home

Budget 2018 - 19 has launched various schemes to empower Indian Women. They are

  • The Prime Minister’s Ujjwala Scheme: Free LPG connection for 50 million BPL families. Target to be increased to 80 million. The LPG connection to be given on the name of the women in the house. This scheme targets health concern of women, reduce the existing high-level indoor pollution and provide employment to rural youth in the supply chain.

    Household pollution is responsible for 5 lakh deaths in India every year.

    The funds for this scheme is being provided from Corporate Social Responsibility Fund of state fuel retailers. Priority to be given to states where the coverage is poor.

  • PM’s Saubhagya Yojana to provide electricity to all households, the government spending 160 billion rupees.

  • 19.75 crore have been sanctioned for Women safety for Nirbhaya Fund

  • Rs 75,000 crore rupees will be provide as loans to Women Self Help Groups till march 2019. Self Help Groups to be encouraged to take up Organic farming, loans to be provided in this regard.

  • A new Gold Policy is in the anvil whereby women can deposit their gold in the bank and earn interest rate of 2.25%-2.5%

  • The contribution of EPF has been cut from 12 % to 7 % for first 3 years. There would be no change in employer’s contribution.

  • Six month maternity leave with full salary will be given to women employees. The department of Personnel and Training has instructed all ministries and departments to implement a 2015 Delhi High Court order for granting maternity leave to women who choose to have one child through surrogacy (to include pre-natal and post-natal period).

  • Rs 24 crore sanctioned for National Women’s Commission

  • 20 million new toilets will be constructed under SMN.

  • Rs 280 crore have been provide under “Beti Bachao Beti Padhao” (BBBP) programs. The BBBP is a collaborative initiative being run by Ministry of Women and Child Development, Ministry of Human Resource Development and Ministry of Health and Family Welfare. Covers all Indian states and UTs. Launched in year 2015. The objective of the scheme was

  • Prevent female infanticide

  • Devise new schemes and work cohesively to ensure that very girl child is secured and protected.

  • Ensure every girl child gets quality education

  • Sukanya Samridhi Yojana- a small deposit scheme for girl child launched. The scheme offers 9.1 % tax free rate of interest which is compounded annually. The account can be closed after completion of 21 years. Normal premature will be allowed after completion of 18 years provided the girl is married.

Deciphering the Ease of Doing Business Initiatives

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Ease of Doing Business Index & India (Current Affairs/GS 2017 - 18) - WW. 48

Dr. Manishika Jain explains Ease of Doing Business & India’s position.

The underlying objective behind the government’s agenda to improve Ease of Doing Business (EoDB) is to unshackle the investment and employment potential of the country.

Some positive developments on the EoDB front include

  • Company incorporation within a day

  • Simplification of Indirect compliances by introduction of GST

  • Faster insolvency resolution owing to the implementation of Insolvency and Bankruptcy Code

The Centre has also promoted a spirit of competitive federalism among states by pushing that state governments to introduce business reforms rigorously in a range of areas such as labour, land, inspections and dispute resolution among others.

The initiatives are beginning to yield results which can be seen in the World Banks’ report in Ease of Doing Business, India has jumped by 30 spots (out of 190 countries) from a level of 130 last year.

Union Budget was expected to provide a decisive policy direction and the way forward on the unfinished agenda of EoDB reforms.

Key EoDB initiative for Corporate Sector

  • Larger Financing for MSMEs: The government has allocated Rs. 3 lakh crores to MSME sector for proving credit support, capital and interest subsidy to address the problem of credit shortage faced by MSME. Innovative measures to access bank credit such as generating financial information database for MSME to address the issue of lack of credit history and use of Fintech to ensure easier accessibility of working capital

  • Simplifying sanctioning of loans to MSMEs: The Trade Receivable Discounting System (TReDS) of sanctioning loans to SMEs by linking it with GST Network (GSTN), to help MSMEs with better management of working capital and faster discounting of bills. Banks would pro-actively provide loans as they will have access to information on cash flows.

  • Taxation Relief: Reduction of Corporate tax to 255 for companies with annual turnover upto Rs. 250 crores. This move would benefit 99 % of MSMEs, which would leave them with higher investible surplus eventually contributing to growth and employment.

  • Relief in NPAs treatment of MSMEs: The government announced its intention to treat NPA effectively. RBI has issued a notification allowing MSMEs borrowers to delay their loan payments upto 180 days which is twice the mandated period.

    This would address cash flow issues of MSMEs and meeting repayment obligations with banks and NBFCs.

  • Unique Id: The government has proposed a scheme for unique identification for enterprises in line with Aadhaar for citizens. This would replace the need to maintain multiple registrations.

  • National Logistics Portal: The logistics department the Department of Commerce is developing online National Logistics Portal to address the long pending issue of gaps among stakeholders such as logistics service providers, buyers, customs, hinterland waterways, costal shipping etc. If the portal is implemented successfully would bring relevant stake holders on one platform and would reduce logistics cost by 10%.

  • Fixed term employment for all sectors: Hiring of employees for specific period, earlier applicable only to textile industry is proposed to be extended to all sectors. The provision to boost sectors like leather, footwear and accessories. This initiative would provide push to employment generation. The employers could hire directly the fixed term workers, without any mediation and would result in cost savings for the company.

  • Uniformity in Stamp Duty: The Central Government to coordinate with all State governments to take reform measures on stamp duty. The Stamp Duty ranges from 4 % to 7 % across states. The uniformity would help in reducing distortion in land/property prices.

  • Technology-based governance: The government is aiming for universal computerization of all District and sub-ordinate courts. This would facilitate the effective implementation of National Judicial grid. The focus of e-courts with facility of e-filing and e-payments will strengthen the Contact Enforcement mechanism where in India currently ranks at 164.

  • 👌 Electronic Toll Payment: The government is taking measures to replace physical cash payment of toll with electronic payment system and Fastags. Implementation of “pay as you use”, currently being run on a pilot basis.

  • Boost to Defense Production: With introduction of private investment in defense production, the government is planning to develop two defense industrial production corridors. This will help in defense import substitution and also generate employment

The Defense Production Policy 2018 also proposed to promote domestic production by public and private sectors including MSMEs.

  • Revised Outward Direct Investment Policy (ODI): The budget announced reviewing of existing guidelines and to introduce a more coherent and integrated Outward Direct Investment Policy. The government is working on hybrid instruments which the Indian companies, especially startups and venture capital firms will be able to use for raising FDIs.

  • Industry Feedback: The government has introduced an exercise of incorporating industry feedback in evaluating rankings of states/UTs in implementation of reforms introduced as part of Business Reform Action Plan (BRAP) by the Department of Industrial Policy and Promotion (DIPP).

The government has announced several EoDB initiative which includes upgradation of rural haats to GrAMs and linking with e-NAM to facilitate direct transaction between consumers and farmers. Setting up of Long Term Irrigation Fund (LTIF), introduction of Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) and Animal Husbandry Infrastructure Fund (AHIDF).

States could have also been encouraged to undertake e-governance initiative, including integration with Shram Suvidha Portal of the Centre, Implementation of GIS, digitization and amalgamation of land records and bringing municipal corporations online.

Transparent Tax Administration

  • Black money not only creates a fiscal dent in the coffers of the exchequers but it also corrupts the moral fabric of society. Black money breeds corruption, both erode citizen’s faith in democracy.
  • Ease of Doing business Index: positive changes have been recorded across all 10 sub-indices, the maximum change was in ‘Paying tax Category’, where India jumped from 172 to 119.
  • The Economic Survey 2017 - 18 notes that there has been 50 % increase in unique indirect tax payers under GST compared to pre-GST system. There has been an addition of about 1.8 million individual tax filers since Nov 2016.
  • Demonetization helped in adding 85.51 lakh new taxpayers as against 66.26 lakhs. The effective tax payer has been increased to 8.27 crores. The buoyancy in personal income tax, for financial year 2016 - 17 and 2017 - 2018 is 1.95 and 2.11 respectively
  • Under Operation Clean Money (OCM), launched by the Central Board of Direct Taxes after demonetization high risk persons were identified using advanced data analytics (including integration of data sources, relationship clustering and fund tracking).
  • 👌 The Operation stands on 3 pillars (honest tax payers, citizen contribution & continuous feedback on positive outcomes). It enabled the ITD to e-verify the target deposits of cash with a low compliance burden on tax payers.
  • Finance Ministry Communique highlighted the enforcement actions based on demonetization data i. e. 158 % increase in number of searches, 106 % increase in seizures, 183 % increase in surveys, 44 % increase in undisclosed income detected in survey action.
  • 👌 Action under Benami Transactions (Prohibition) Amended Act, 2016
  • The prohibition of Benami Properties Transactions Act, 1988 as amended by the Benami Transactions (Prohibitions) Amendment Act 2016, provides subsequent confiscation of benami properties besides rigorous imprisonment up to 7 years.
  • The ITD has set up 24 dedicated Benami Prohibition Units all over the country. More than Rs. 3,500 crore have been provisionally attached in more than 900 cases.

Black Money in Foreign Bank Accounts

  • Black Money (undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, with stringent penal provisions including imprisonment of 3 - 10 years has been enacted to effectively deal with black money stashed away abroad.
  • Tax evasion has been made a predicate offence under Prevention of Money laundering Act, 2002 (PMLA). Government has constituted a Multi-agency Group (MAG) for expeditious and coordinated investigation of Panama and Paradise paper leak cases.
  • During last 3 years, thousands of crores of rupees kept illegally in offshore banks by Indians has been brought under tax ambit despite several constraints. India has tax treaties with 148 countries for Exchange of Information on tax matters besides Mutual Legal Assistance Treaties in criminal matters with 39 countries
  • Action Against Shell Companies - Shell companies have mushroomed over a period abusing simplified corporate procedures.
  • Hundreds of companies are registered at a single address, they have low capital, one or no employee and directors who are individuals of no means. One individual is director of more than dozen companies. Such shell companies over years have established a system of producing fake bills, bogus share capital, bogus loan or even faking a financial transaction.
  • It is hard to detect all shell companies mainly because of the huge number of them, and when detected it is hard to establish their nefarious and illegal activities.
  • The PMO has constituted a Special Task Force under Joint Chairmanship of Revenue Secretary and Secretary of Corporate Affairs to oversee the drive against such companies with the help of various enforcement agencies. Action are being undertaken by different law enforcing agencies.

The slew of measures that have been taken to crack down on domestic and foreign shell companies are

  1. Enactment of the Black Money (Undisclosed Foreign Income and Assets)
  2. Imposition of Tax Act 2015
  3. Amendment of Benami Transaction (prohibition) Act 1988
  4. Amendment of Income Tax Act 1961 to introduce the concept of “Place of Effective Management” (POEM)
  5. Amending Companies Act to incorporate the definition of ‘beneficial ownership’

SPICe (Simplified Performa for Incorporating Company electronically) was introduced to get e-KYC of initial subscribers. SPICe platform is used or allotment of PAN to the companies. Aadhaar seeding has been made compulsory for all Directors of the companies.

Ministry of Corporate Affairs (MCA) has undertaken a massive drive against shell companies. In 2017 around 2.24 lakh companies have been struck off. Further action was taken against 1.2 lakh companies has been initiated. Restrictions have been imposed on operation of their bank accounts and transfer of movable and immovable properties, around 3.09 lakh directors have been effected.

👌 National Financial Reporting Authority (NFRA) is being setup to examine financial statements of companies, prescribe ‘Accounting Standards’ and take disciplinary action against errant professionals.

MoU have been signed between CBDT and MCA for regular and automatic data exchange. It will further ensure seamless PAN-CIN (Corporate Identity Number) and PAN-DIN (Director Identity Number) linkage for regulatory purpose.

Government has introduced a Bill to amend the PMLA, 2002 through Finance Act 2018, to include corporate frauds under Section 447 of Companies Act as scheduled offence under PMLA so that Registrar of companies, in suitable cases would report for action by Enforcement Directorate under PMLA.

👌 Project Insight

Government has embarked upon a massive technology induction program to prevent revenue frauds and augment revenues through data mining and business analytics for non-intrusive information tax regime. The project INSIGHT of CBDT is one of the biggest data mining and business analytics project to likely go live fully in 2081 - 19. The project aims to

  • Identify non-filers

  • Prevent revenue frauds

  • Eliminate revenue loss due to false claims of deduction

  • Promote voluntary compliance.

Budget 2018 - 19

The proposals of direct taxes will have transformative effect on cleaning of economy. The Budget proposal include

  • Rationalization of ‘Long term Capital Gain’ (LTCG)

  • Checking of abuse of trust structure

  • Mandatory filing of ITR by companies

Tax compliance

  • The Finance bill amends the provisions related to prosecution proceedings against a company for non-filling of return. Now irrespective of the fact that whether tax is payable or not by a company, it will have to mandatorily file return or face prosecution, thus promoting compliance by companies. It would also avoid mushrooming of shell companies.

Rationalization of LTCG

  • The tax exemption from LTCG has been the most abused provision. Thousands have been claimed as bogus LTCG through investment in illiquid penny stocks in order to evade income tax on black money.
  • Individuals have routed their unaccounted money in the grab of non-genuine LTCG in collusion with certain operators.
  • The total amount of exempted capital gains from listed shares and units is around Rs. 3,67,000 crores. Major part of this gain has accrued to corpora rates and LLPs. This has led to significant erosion in the tax base resulting in revenue loss. There is also abusive use of tax arbitrage opportunities created by these exemptions.
  • Parliament IT department has referred more than 140 scrips which were “apparently found having been manipulated” to SEBI.
  • SEBI has passed orders under section 11 (B) of SEBI act, 1992 in case of 13 such companies and debarred 1336 entities.
  • These shares were allotted through private placements. To curb this menace of non-genuine LTCG, the government has restricted the exemption from LTCG to those only where security Transaction Tax had been paid at the time of acquisition. In order to rationalize the taxation regime on LTCG, the Finance Minister has proposed to tax LTCG exceeding Rs. 1 lakh at the rate of 10 % without allowing the benefit of any indexation.

Faceless E-Assessment

  • The tool for e-governance must not only be effective and efficient but also should be handy in creating a transparent and accountable system. ITD has been pioneer in the field of use of e-governance tools for delivery services.
  • Schemes like e-TDS, e-filing of Income Tax Returns, Refund Banker, e-payment of taxes, Centralized Processing centre and e-Assessment have not only reduced the cost of compliance but also helped department in ushering in assesse-friendly, transparent and fair tax administration.
  • Consultative Committee attached to the Ministry of Finance has stated that 97 % of ITRs filed were electronically last year out of which 92 % returns were processed within 60 days and 90 % refunds were issued within 60 days.
  • e-assessment was introduced in 2016 in 102 cities as a pilot project, the government is planning to roll out e-assessment across the country. A new scheme for assessment where the assessment will be done in electronic mode which will almost eliminate person to person contact thereby leading to greater efficiency and transparency. Many foreign tax administration like United Kingdom have largely a faceless interface with taxpayer.
  • Scrutiny enquiries are conducted by different teams at remote locations. Faceless taxpayer interface will not only increase taxpayer’s confidence in the tax administration but it would also eliminate their grievances against scrutiny process.

Curbing the Misuse of Trust Structure

  • Comptroller and Auditor General (CAG) of India conducted the performance audit of assessment during the period of July 2016 to November 2016 and highlighted the alleged misuse of tax exemptions by trusts.
  • Last year the budget brought down the threshold on cash donation that can be received by the charitable organization to Rs. 2,000 from Rs. 10,000. The trust did not have any restriction on cash expenditure. It is difficult to establish audit trail of cash expenditure. In order to control the cash economy and check the misuse of funds, this year budget proposed that payments exceeding Rs. 10,000 in cash shall be disallowed and the same shall be subject to tax. The budget also proposed that in case of non-deduction of TDS, 30 % of the amount shall be disallowed and the same shall be taxed.
  • The budget also has made it mandatory to apply for PAN, for every entity, not being an individual, which enters into any financial transaction of an amount of Rs. 2.5 lakh or more in a financial year. Directors, partners, principal officers, office bearers or any person competent to act on behalf of such entity shall also apply for PAN.

Miles to GO

  • A six member task force under the convenorship of a CBDT member and with Chief Economic Advisor as permanent invitee has been constituted to review the Income Tax Act 1961, and to draft a new Direct Tax Law in consonance with economic needs of the country, direct tax system prevalent in other countries, international best practices. The committee is mandated to submit report in 6 months.
  • Government approach aimed at creating an ecosystem for ‘swachh dhan’ enabling all of us to celebrate “imandari ka utsav”. Increasing use of information technology and allocating higher resources on human resources development are key to a sustainable success of tax department in the crusade against black money.

Miscellaneous News

Pay as You Use

  • It is a pilot project of tolling launched by National Highways Authority of India to study the implement ability of the system in the country. The pilot project involves implementing a satellite based electronic toll collection system running on GPS/GSM technology for a round 500 commercial vehicles on Delhi Mumbai National Highway.
  • To run for one year, to use mobile telecommunication technology (GSM) and satellite based Global Positioning System—the tolling system to deduct money from vehicle account, credit the money to the concessionaire in a day and open the poll gates. In case of failed transaction, it would be able to alert the toll operator to collect manually and not open the gate.
  • The pilot project to look at ways to integrate the new solution with existing pre-paid wallet account offered by NHAI under FASTag program. It will also draw a comparison between distance based tolling and the existing tolling system as also virtual tolling vs normal tolling.

Allocation for Socially Weaker Sections

  • Increase of 12.1 % for Ministry of Social Justice and Empowerment (Rs 7750 crore). 11.57 % in budget allocation for schemes in 2018 - 19.41. 03 % increase in budget allocation for welfare of OBC in 2018 - 19.
  • A New Scheme Venture CAPITAL Fund for OBCs on similar lines as Venture Capital fund for SCs with an initial corpus of Rs. 200 crore. The skill Development Training has been given to 13,587 manual scavengers and their dependents. 809 manual scavengers and their dependents have been provided bank loans.
  • Pre-Matric Scholarship for OBC, income eligibility has been increased from Rs. 44,500 per annum to Rs. 2.5 lakh per annum. For Sc the eligibility has been raised from Rs. 2 lakhs to Rs. 2.5 lakhs. Stipend for day scholars has been raised from Rs. 150 to Rs. 225 and for hostlers from Rs. 350 to Rs. 525.
  • Top Class Education for Scheduled Caste has been raised from Rs. 4.5 lakh to Rs. 6 lakh per annum. Free coaching for SC and OBC student, income eligibility has been raised from Rs. 4.5 lakhs to Rs. 6 lakhs.
  • Stipend has been raised from Rs. 1500, Rs. 2500 to Rs. 3000 and Rs. 5000 for local and nonlocal students respectively.
  • Under the national Fellowship for Scheduled Castes, the assistance has been increased from Rs. 25,000 to Rs. 28,000.

More Than 1.26 Crore Accounts Opened under Sukanya Samriddhi Account Scheme

  • The Union Ministry for Finance and Corporate Affairs stated that the Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY) has benefitted 5.22 crore families with a life insurance cover of Rs. 2 lakh on payment of a premium on Rs. 330 per annum.
  • Pradhan Mantri Suraksha BimaYojna, 13 crore 25 lakh persons have been insured with personal accident cover of Rs. 2 lakh on payment of a premium of Rs. 12 per annum.
  • The Government to expand the coverage under PM Jan Dhan Yojana by bringing all 60 crore basic accounts within its fold and undertake measures to provide services of micro insurance and unorganised sector pension scheme through these accounts.

Gold Monetization Scheme

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Gold Monetization Scheme & Sovereign Gold Bond Scheme (4 Tranches) - IAS GS 2016

Dr. Manishika Jain explains the concept and idea behind Gold Monetization Scheme (GMS), the need for GMS and flow of gold in Economy

Gold Monetization Scheme and Bond Scheme

  • Union Budget- Measures for Ease of Doing Business
  • The Government is also transforming method of disposal of its business by introduction of e-office and other e0governance initiatives in central Ministries and Departments. 👌 A web based Government Integrated Financial Management Information System (GIFMIS), is being administered by controller General of Accounts, for budgeting, accounting, expenditure and cash management of the Government.
  • A Central Public Procurement Portal provides a single point access for all information on procurement. Around 3.5 lakh contractors and vendors are registered on this platform. In 2017 alone, electronic bids over one lakh tenders valued at around 2,40,000 crore were invited through portal.
  • 👌 The government E-Marketplace (GeM) facilitates procurement at the right price, in right quality and quantity in a transparent and efficient manner. The platform has 78000 buyers, 50,000 sellers, 3,75,000 products and 12 services. It could achieve savings of more than 25 % over the base price.
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Image of Rupee Comes From

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Union Budget: Yojana March 2018 Summary (In Hindi)

Dr. Manishika Jain explains Yojana March 2018: Union Budget

👌 implies important for Objective Questions/MCQ

📝 implies important for Subjective Questions

📹 implies covered in Videos or Upcoming Videos

- Published/Last Modified on: April 1, 2018


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