Highlights of Union Budget 2018

1. S N & Co.
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2. S N & Co.
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Individual / Personal Taxation Column
1) No changes in personal income tax rates & slabs
2) Cess will be referred as “Health and Education cess” & effective rate increased to 4%.
3) Variation in stamp duty value & sale consideration of immovable property to extent of 5% of sale
consideration is proposed to be accepted from FY.18-19.
4) Standard deduction upto Rs. 40,000/-is introduced against Transport Allowance (for other than
handicap person) and reimbursement of medical expenses which is proposed to withdraw
5) LTCG above Rs. 1 lakh on legitimate sale transaction of equity shares shall be taxed @ 10% without
giving benefit of indexation. All gains upto 31.1.2018 are grandfathered. Tax applicable on sale from
FY.18-19
6) Crypto currencies continued to be considered as not “legal tender”.
7) E-assessment is proposed to reduce interface between income tax department and taxpayers.
8) Benefit of tax-free withdrawal upto 40%from National Pension system (NPS) is extended to non-
employee subscribers
9) Deemed dividend in form of loans and advance by Company will be subject to DDT @30%from 1st April
2018
10) Consequences of disallowance for non-deduction of TDS or payment in mode other than cash exceeding
10,000/-till also be applicable to Charitable Trust and Institution
11) Any compensation whether revenue or capital, in connection with termination or modification of the
terms of any contract relating to its business or employment shall be taxable
12) Trading of agricultural commodity derivatives in a registered stock exchange will be treated as non-
speculative transaction
13) Conversion of stock in trade to capital asset is subject to taxation and holding period of capital asset
shall be from the date of conversion
14) Exemption of 54EC i.e. investment in capital gain bonds restricted to transfer of land and building and
investment period extended to five years

3. S N & Co.
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15) All entities other than individuals and their office bearer enters into financial transaction above 2.50 lacs
in financial year are required to obtain PAN
For Senior Citizens
1) Interest on deposit up to Rs 50,000is not taxable & not subject to TDS.
2) Exemption under Section 80D available upto Rs 50,000 for medical insurance u/s 80D. Deduction will
be spread over insurance tenure for single premium insurance
3) Exemption limit for medical expenditure for certain critical illness raised from Rs 60,000/- in case of
senior citizens and from Rs 80,000 in case of very senior citizens, to Rs 1 lakh in respect of all senior
citizens, under section 80DDB.

4. S N & Co.
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Rate of Surcharge Turnover 1 –10Crs Exceeds Rs. 10 Cr.
Domestic Companies 7% 12%
Other than Domestic Co. 2% 5%
3) Surcharge will also be levied at the appropriate rates in cases where the company is liable to tax under
section 115JB of the Act.
4) For financial year 2018-19,additional surcharge called the “Health and Education Cess on income-tax”
shall be levied at the rate of 4%
5) Deemed dividend in form of loans and advance by Company will be subject to DDT @30%
6) As per section 28, from 1st April 2019 any compensation received or receivable in case of cancellation or
modification of contract which is related to business will be taxable even in case of employment
service. (From 1st April 2019)
7) Profit link deductions shall not be allowed unless the return of income is filed within due date.
8) Relaxation for set off of losses and unabsorbed depreciation under MAT norms and carry forward of
losses under normal tax norms for Companies seeking insolvency resolution
9) Transaction of money or property between a wholly owned subsidiary company and its holding
company is excluded from gift tax subject to condition.
10) Option trading of Commodity transaction shall be subject to Commodity Transaction Tax
11) Deduction u/s 80-JJAAis allowed if employees employed for 150 days or more in case of apparel or
footwear and leather industry.
12) Tax benefit for START UP extended until March 2021 which condition of turnover not exceeding Rs.
25.00 crores for seven years from date of incorporation. Even definition expanded to cover
improvement of products or processes or services, or a scalable business model with a high potential of
employment generation or wealth creation
13) 100% deduction u/s 80Pallowed to Farm Producer Companies when income received from specific
activities having turn over up to 100cr.
14) Penalty order for furnishing incorrect report or certificate is now appealable to ITAT.
Corporate Taxation Column
1) Corporate tax rate in case of domestic companies having total turnover or gross receipts in FY.16-17 not
exceeding Rs. 250crores is proposed to be reduced to 25%
2) Rate of Surcharge.

5. S N & Co.
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15) Outcome of Delhi High Court are struck down by introducing provision of ICDS under respective
section retrospectively
16) Presumptive taxation u/s 44AE of the Act for heavy goods vehicle (more than 12MT gross vehicle
weight) has undergone a change i.e. 1000 per ton per month for each goods vehicle or the amount
claimed to be actually earned by the assessee, whichever is higher.
International Taxation Column
1) Royalty and FTS payment by National Technical Research Organization (NTRO) to a non-resident not
being a company, or a foreign company, will be tax exempt
2) Business Connection for non-resident
i) Business connection definition is proposed to widen to cover arrangement where person playing
principal role leading to conclusion of contracts for non-resident
ii) Concept of “Significant Economic Presence” in India is introduce to tax digitized business which do
not require physical presence of itself or any agent in India
3) Rationalization of time limit for filing of CBCR report retrospectively from AY.17-18.
4) Foreign company comprising total income solely from business referred U/s.44B/BB/BBB/BBA
offering tax at specialized rates are not subject to MAT provisions effectively from 2001.

6. S N & Co.
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Borivali (West), Mumbai – 400 092.
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