Highlights of the Union Budget 2017: What it means for You

Like every year, this year too, India woke up to the Union Budget 2017 on the first day of February, presented by Finance Minister Arun Jaitley. The 4th annual budget presented by Prime Minister Narendra Modi’s Government, the budget this year has put the spotlight on the common man, bringing much cheer to smaller income groups, the farming sector, rural development, public infrastructure and the affordable housing sector.

Approving of the presentation of the budget, the Prime Minister commended Mr. Jaitley stating, “the Finance Minister has presented an uttam budget, devoted to strengthening the hands of the poor”. The budget this year reflects the Government’s commitment to eliminate black money from the market. Mr. Jaitley himself sought to begin his presentation in defence of demonetisation, promising to the nation that its effects would not spill over into the new year. The minister unfolded a plan that aims to cushion the sections that are worst hit by demonetisation – the rural poor, farmers and individuals who earn an annual income between 2.5 to 5 lakhs. Commendably, despite the on-going election fervour in two states, the Finance Minister did not pack in any ‘election freebies’ as was otherwise speculated. And, this was aptly reflected in the economy, when the markets rose 500 points soon after his budget speech. As the Prime Minister described it, this is a budget for the future that will be inclusive of farmers, urban rejuvenation, rural development, enterprise and above all an attempt to bring about greater transparency.

The Union Budget 2017 was presented primarily to include the 10 areas of development: the farming sector, the rural population, the youth, the poor and underprivileged health care, infrastructure, the financial sector for stronger institutions, speedy accountability, public services, prudent fiscal management and tax administration for the honest.

We take a look at some of the important highlights of the budget that concern the areas of Real Estate and Infrastructure, Taxation Policies and the Financial sector.

*Source: The Hindu and Economic Times


Real Estate and Infrastructure:

  • Affordable Housing has been given Infrastructure status
  • In line with the theme ‘Housing for All by 2022’, 1 crore rural houses will be created by 2019
  • National Housing Bank to refinance Rs 20,000 crore loans
  • Rural housing scheme, Pradhan Mantri Awas Yojana to get Rs 23,000 crore and will be extended to 600 districts
  • Real estate developers to get tax relief on unsold stock as liability to pay capital gains will arise only in the year a project is completed
  • Instead of Built up area of 30 and 60 sq. mtr., the carpet area of 30 and 60 sq. mtr. Will be applicable for affordable housing
  • Holding period for capital gains tax for immovable property reduced from 3 years to 2 years
  • Tax break of 1 year post receipt of the completion certificate, for unsold stock, to developers
  • New FDI policy under consideration
  • Rs 2.41 lakh crore has been allocated to give a boost to transportation infrastructure
  • Total allocation for the infrastructure sector set at Rs. 3,96,135 crore
  • Allocation or Rs. 64,000 crore for National Highways
  • Indexation for capital gains shifted from 01-04-81 to 01-04-2001

Taxation and Personal Income Tax

  • Holding period for long term capital gains lowered to two years
  • Proposal to have a carry-forward of MAT for 15 years
  • Capital gains tax to be exempted for persons holding land from which land was pooled for the creation of the state capital of Andhra Pradesh
  • Proposal to reduce tax for small companies with a turnover of up to Rs 50 crore, to 25%. About 67 lakh companies fall in this category. 96 % of companies to benefit from this
  • Window for availing 3-year profit-linked incentives for start-ups increased to 7 years against 5 years earlier
  • The government proposes to reduce basic customs duty for LNG to 2.5% from 5%
  • The Income Tax Act to be amended, to ensure that no transaction above Rs 3 lakh is permitted in cash.
  • Net revenue loss in direct tax could be Rs. 20,000 crore
  • Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh reduced to 5% from 10%
  • All other categories of tax payers in subsequent brackets will get a benefit of Rs 12,500
  • Simple one page return for people with an annual income of Rs. 5 lakh other than business income
  • People filing I-T returns for the first time will not come under any government scrutiny
  • 10% surcharge to be levied on individual income above Rs. 50 lakh and up to Rs 1 crore
  • 15% surcharge on individual income above Rs. 1 crore to remain

Financial sector

  • Shares of Railway PSE like IRCTC will be listed on stock exchanges
  • Bill on resolution of financial firms will be introduced in this session of Parliament
  • Foreign Investment Promotion Board will be abolished
  • Revised mechanism to ensure time-bound listing of CPSEs
  • Computer emergency response team for financial sector will be formed
  • Pradhan Mantri Mudra Yojana lending target fixed at Rs 2.44 lakh crore for 2017-18
  • Digital India – BHIM app will unleash mobile phone revolution. The government will introduce two schemes to promote BHIM App – referral bonus for the users and cash back for the traders
  • Negotiable Instruments Act might be amended
  • Economic offenders fleeing India will be liable to their assets within the country being confiscated, upon the introduction of a legislative change or law to do so


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