An Analysis of Budget 2018-19 and details impact analysis on your investment. Simple Strategy, Suggesting for efficient Tax Planning and wealth creation for Long Term

1. BUDGET ANALYSIS 2018-19 Issue #
Decoding Budget 2018-19
By
Vishwanath Shettigar (Cofounder)
Wealth Nest Advisory

2. BUDGET ANALYSIS 2018-19 Issue #
Analysis of Budget
Personal Tax
 No Change in Income Tax Slab
 Education Cess and Secondary and Higher Education Cess to be replaced by Health and Education
Cess at the rate of 4% of tax and surcharge
 Transport Allowance of Rs 19,600 p.a and Medical Allowance of Rs 15,000/- Removed
 Standard Deduction Introduced of Rs 40,000/- p.a
 w.e.f 01st April 2018 LTCG on Listed Equity Shares and Equity Oriented Mutual Fund @10%.
Income upto 1 Lakh will continue to remain exempted. Tax will be Applicable incase if income is
above 1 Lakh
 Section 80D limit hiked to Rs 50,000 for senior citizen
 Senior citizens: Exemptions in income of Rs 10,000 from Banks FD and post offices
 Section 194A of the Act is proposed to be amended so as to raise the threshold for deduction of
tax at source on interest income for senior citizens from existing INR 10,000 to INR 50,000.
 Grandfather Clause to protect gain earned upto 31st January 2018
 Dividend Distribution Tax Applicable @ 10% on Dividend from Equity oriented Mutual Fund
 Capital Gain Saving under Bond period revised from 3 to 5 year and now restricted to gain arising from
Land or Building earlier it was gain from any Long Term Capital Asset.
Our View
 No need to preserve Medical Bills benefits people as there will be less paper work
 LTCG will impact have impact on your total returns of MF & Equity. One need to plan redemption smartly
 Dividend Plan of Mutual Fund will now onward have double taxation. Since DDT is applicable on
Dividend and on sale of MF unit, it will be taxed again
 Our Advice is to Shift All investment from Dividend Plan of Mutual Fund to Growth Plan and opt for
Systematic Withdrawal Plan

3. BUDGET ANALYSIS 2018-19 | Issue # 3
Different Tax Slab 5% 20% 30% 5% 20% 30%
Income form Salary 450,000 900,000 1,800,000 450,000 900,000 1,800,000
Less Exemption
Travelling Allowance 19,600 19,600 19,600
Medical Bills 15,000 15,000 15,000
Standard Deduction 40,000 40,000 40,000
Total Exemption 34,600 34,600 34,600 40,000 40,000 40,000
Taxable Income 415,400 865,400 1,765,400 410,000 860,000 1,760,000
Tax on Income 5,770 85,580 342,120 5,500 84,500 340,500
Education & Higher Education Cess 173 2,567 10,264
Health and Education Cess 220 3,380 13,620
Total Tax Payable 5,943 88,147 352,384 5,720 87,880 354,120
Total Saving 223 267 1,736-
Particular Pre Budget Post Budget
Impact of New Tax Rates and Exemptions Pre and Post Budget with Different Slab Rate

4. BUDGET ANALYSIS 2018-19 | Issue # 4
Understanding of Grandfathering Clause on LTCG
Grandfather Clause:
Cost of Acquisition will be
 In case of Listed Equity Shares
Highest Intraday price of Equity share on 31st
Jan 2018 or Cost of Purchase whichever is
higher
 In case of Mutual Fund
Closing NAV on 31st
Jan 2018 or NAV as on Purchase date whichever is higher

5. BUDGET ANALYSIS 2018-19 | Issue # 5
Way Forward
1. Book profit upto 1 lakh by switching fund at year end since 1 lakh exemption is available every
year.
2. Shift All investment from Dividend Plan of Mutual Fund to Growth Plan and opt for
Systematic Withdrawal Plan for maintain cash flow
3. Incase if there is need for fund around April or May. It is advising to book profit before 31st March 2018
to avoid Capital Gain
4. However, if Government allow Indexation then one need to ignore point no 1 & 3. We believe
government may allow indexation benefit to bring Equity in line with other asset class

6. BUDGET ANALYSIS 2018-19 | Issue # 6
Corporate Tax
 Corporate Tax Reduced to 25% for Companies having Turnover of less than 250 Crores for FY
2016-17
 Section 80JJAA Amended provide for a deduction of thirty percent of additional wages paid to
new regular workmen in a factory for three years.
o Deduction for additional employment generation rationalized –
o Benefit allowed to new employee who is employed for less than 240 days during first year
but continues to remain employed for 240 days in the subsequent year
o Minimum employment period of 150 days extended to footwear and leather industry
o Rationalization of provisions for companies seeking resolution under IBC, 2016, including
relief under MAT, relaxation from rigors of section 79 of the Act, etc
 100% deduction proposed to companies registered as Farmer Producer Companies with an
annual turnover upto Rs 100 crore on profit derived from such activities, for five years from
2018-19.
Disclaimer we have gathered data from news website, Facebook survey and summarized the same to complete
these article. Even the Image is downloaded from google