Important Updates & Impact of Union Budget 2017
Finance Minister, Arun Jaitley, presented the Budget for the financial year 2017-18 on February 2nd, 2017. With the aim to make India a developed and strong nation, the Ministry of Finance, India, always focuses on presenting a planned budget on which they work the entire year. This year with some new plans, FM Arun Jaitley has propounded the budget which has brought some crucial opportunities in the finance industry.
Important Announcements & Their Effects
The agenda of Budget 2017-18 as per Finance Minister, Arun Jaitley is Transform, Energize, & Tech India. The following are the most important and highly affecting updates on the budget presented for you:
#1 Tax Rate Reduced to 5% on Income Between 2.5-5 Lakh
The major and most-liked budget update for the Indian citizens is regarding the changes in the slab rate on income between 2.5 lakh to 5 lakh. FM has announced the rate cut of 5% on the income tax applicable on income between 2.5 to 5 lakh. Accordingly, the individuals falling in the slab will be benefited with 50% tax reduction for the financial year 2017-2018. Moreover, many taxpayers will get relief from the entire tax payable amount or their liability will be reduced to the extent of 50%.
#2 Base Year Changed to 2001 from 1981 to Calculate Indexation Benefit
Th long-term capital gains on debt mutual funds are chargeable to tax at the rate of 20%. At present, to calculate the indexation benefit for computing the total long-term gain, the base year is considered to be 1981, but w.e.f., April 1, 2017, it would be 2001. The benefit to the debt fund investors would be that their cost of acquisition will be computed as per the NAV on April 1, 2001, and accordingly their capital gain until the date of sale would be calculated. This way, their capital gain amount shall get reduced.
#3 Cash Transaction Above 3 Lakh Shall Not Be Allowed w.e.f., April 1, 2017
FM has made an important announcement regarding the transactions done in cash at present. From the new financial year beginning in April 2017, all transactions above Rs. 300,000 shall not be allowed to be done in cash anymore. This has been done to boost the banking and finance sector. Moreover, according to this, the chances of keeping excess cash in hand shall be reduced, and the accurate money in flow shall be easily evaluated. With bank deposits, the flow of cash in the economy will be higher, and the interest rates would be reduced.
#4 Govt. Allocated Rs.3.96 Lakh Crore For Infrastructure
As per the union budget 2017, Government of India has decided to allocate an amount of Rs.3.96 Lakh Crore to the infrastructure sector, with an aim to develop the infra of the country. With this, it has been expected that this sector will gain a dominant position in the upcoming years. Thus, the Infrastructure Sector Funds can be a good scheme for the investors to make considerable profits in the future.
#5 Allocation of Rs.2.41 Lakh Cr for Transport Sector
The transportation industry is further expected to get a boom as the government will be allotting a fund amounting to Rs.2.41 Lakh Crore to the transport sector. Accordingly, the current investors having investments in the transport industry would be benefited and the newbie investors will get the chance to diversify their portfolio with investments in the transportation sector in order to earn higher profits
#6 Section 80C Benefit
The investors would avail the tax benefit under section 80C by making equity investments in ELSS Funds or other alternatives. Accordingly, the tax exemption of Rs.1.5 lakh would be highly beneficial for the low-income group having earnings between three to five lakh as their taxes will be almost nil rated. So, you must start your ELSS mutual funds investments to gain better benefits.
Accordingly, the Budget 2017 has brought up some new opportunities for the investors and the finance industry to transforming India. It’s our responsibility to grab the best chances of building our future effluent.
If you need assistance for taking any financial decision to grab the best opportunity of Budget 2017, then you must avail the financial advisory services of MySIPonline. The experts will guide you in making the best investment for growing wealth for your future.
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