There was a lot of anticipation and eagerness among average consumers about what would be in store for them in the Union Budget 2018. For the salaried class, which constitute many parents, the biggest worry was – will the expenditure go up for my family?
Presenting the Union Budget 2018 in Parliament, Finance Minister Arun Jaitley said that the Government was looking at promoting ‘Ease of Living’ for its citizens, through this budget. He announced some landmark schemes that the Government has proposed which are primarily aimed at the common man, specifically the marginalised. The most notable is the National Health Protection Scheme (NHPS) that aims to provide health insurance worth Rs 5 lakh every year to 10 crore poor families in the country.
So, what does the budget hold for the average Indian family? Here are 10 things in the Union Budget that will impact parents. Read on….
1. Standard deduction makes a comeback – For parents who belong to the salaried class, the standard deduction of Rs. 40,000 from the salary income brings cheer as it lowers the income tax liability. This means you may be able to save some money for your little one. However, the cess on personal income tax and corporation tax has gone up by one per cent for all categories.
2. Tax on transport allowance – With the standard deduction of Rs. 40,000, the earlier tax sops on transport allowances and medical reimbursement become redundant. Because of this, some individuals may end up paying more tax, depending on their salary slab.
3. Get ready to pay LTCG – The budget has introduced 10 per cent long-term capital gains tax (LTCG) on gains over Rs 1 lakh from shares. If you are a parent who has some portfolio of your savings invested in long term equities and are making some money there, be prepared to shell out 10 per cent tax without indexing.
4. Pay more for toys – Parents buying imported toys and games for their little ones will have to brace themselves to pay more on these products. The budget has doubled the customs duty on toys such as puzzles, tricycles, scooters, pedal cars and other wheeled toys, to 20 per cent. Some sports goods and gym equipment will also be expensive.
5. Technology initiatives –The push for education and research in robotics, artificial intelligence, internet of things and cyberspace means better opportunities for our children. The budget has allocated Rs 3,073 crore in 2018-19 for the Digital India programme.
6. Push for quality education – The focus on converting the majority of blackboards to digital boards and on improving the quality of teachers through an integrated B.Ed programme will increase the standard of school education.
7. Custom duty up on imported goods – If you are planning to get that new imported mobile phone that has just come into the market, for your teenager, brace for a price rise owing to increase in custom duty. Custom duty on mobile phones is now 20 per cent. Also, get ready to shell out more on television sets, imported juices, footwear, jewellery, watches and furniture.
8. Cheer for senior citizens – Families with senior citizens at home have reason to applaud. Apart from the benefits on medical expenditure announced by the Government for the elderly, the proposal to increase the exemption on the interest income on bank and post office deposits, from Rs. 10,000 to Rs. 50,000 will be a reprieve. The deduction limit for health insurance premium has gone from Rs. 30,000 to Rs. 50,000.
9. Relief for women workforce – Government has decided to contribute 12 per cent of the wages of new employees in the EPF for all the sectors for next three years. The reduction in contribution of first-time women workers in the Provident Fund scheme from 12 to 8 per cent for the first three years may encourage more employment for women workers. This will also mean savings for the household. So, mommies can cheer!
10. Boost for students – Under the Prime Minister’s Research Fellows (PMRF) Scheme, the Government will identify 1,000 B.Tech students from premier institutions each year and they will be given the opportunity to do Ph.D in the Indian Institutes of Technology (IITs) and the Indian Institute of Science. The research fellows will teach undergraduate students once a week for that period and will get a fellowship amount.
What the Expert Says
“It is a good budget but not a populist one. The solid structural reforms initiated by the government to strengthen agriculture, infrastructure, education, health sector and job creation will ultimately benefit the country and all citizens. In terms of day-to-day expenditure for families, the Union budget does not have any serious impact. Parents do not have to be apprehensive about cost of commodities and services as this budget does not touch upon these aspects. All this has already been covered under the GST regime. For those who have invested in the stock market, the long-term capital gains tax (LTCG) on the selling of shares on gains of over Rs 1 lakh, can have some impact," says Chennai-based Investment Advisor, Vivek Kawra.
Some of the major takeaways according to him include -- re-introduction of standard deduction of Rs 40,000 for salaried individuals, investment in health, education and digital initiatives and benefits to senior citizens. Increase of cess from three to four per cent will pinch the average citizen.
Mr Kawra also points out the huge reforms in the education and technology sector that can bring cheer to everyone. Education, health and social sector got an allocation of around Rs.1.38 lakh crore for 2018-19. Through a new project, Revitalising Infrastructure and Systems in Education (RISE), the Government has earmarked Rs. 1,00,000 crore to revitalise research and related infrastructure, for the next four years. Also, 24 new medical colleges have been planned.
Overall, the Union Budget has focussed on overall growth and development that aims at strengthening all sectors.
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