Budget 2018: GST Effect And Focus On Income Tax

Union Budget 2018: 88th Budget After Independence

Our Finance Minister will present our Union Budget before the Parliament in eight days. This is the first Union Budget after the country’s biggest tax reform GST and eighty-eighth Budget after the independence. Last year the budget was presented in a traditional way of presenting the budget in Part A which dealt with financial policies and their significance and part B which deals with various taxations, customs duty, central excise, service tax and VAT with other direct tax subheads like income tax and corporate tax. 

Union Budget 2018: Post GST Budget

In this year’s budget, Part B has become shorter as GST engulfing many indirect taxes, guessing that Mr. Jaitley’s speech will be shorter. There are about 20 sundry cesses which are absorbed by GST. According to CAG (Comptroller and Auditor General), six major cesses gets more than 4 lakh crores of revenue, and 45% of which is still unutilized by the government. Hence the common men need not to worry about new cess being imposed on them.

Union Budget 2018: Focus On Income Tax

Mr. Jaitley was known for doing things differently in the past too. He scrapped the practice of presenting the Union budget in February end. He also presented the railway and union budgets together. This year there are guesses that Mr. Jaitley could focus on income tax exemption limits and/or tax slabs. Even if he decides to raise the exemption limit from 2.5 lakhs to 3 lakhs, there will be tax saving among 75 lakh people according to SBI Ecowrap report. Those individuals who are earning 3-5 lakhs will be able to save Rs. 2500 in taxes. If Mr. Jaitley wants to relax the tax-slab to all the individuals earning between 10-20 lakhs, the savings will be more visible.

Union Budget 2018: Huge Impact On Savings

Mr. Archit Gupta founder and CEO of clear tax India's largest consumer Income Tax e-filing website said that hypothetically if the tax slab is 20% for 10-20 lakhs earnings bracket for individuals, and the tax slab is reduced from 20% to 10% for the earnings for 5-10 lakhs. This will have a huge impact on the savings and the taxpaying amount. This will do well to common man’s savings. The individuals with income up to 10 lakhs will have to pay only half the tax they paid earlier. Those individuals with income up to 20 lakhs, there is a possibility of saving 50, 000 and one-third of the existing tax for individuals earning an income more than 10 lakhs.

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