Finance minister Arun Jaitley on Tuesday moved the Finance Bill in Parliament to get the Budget for 2017-18 passed by this week.
Lok Sabha has listed just the Finance Bill for discussion on Tuesday as it will take time for lawmakers from all political parties to debate the Budget proposals.
Sources say there may not be major changes in the Finance Bill and will be passed after discussion. There may be hardly any changes in indirect taxes as the government is set to roll out the Goods and Services Tax from July.
On February 1, Jaitley said in his Budget speech the government aims to cut the fiscal deficit to 3.2% of GDP during 2017-18 from 3.5% in this financial year.
Here are the five things to watch out for in the Finance Bill:
1. Income tax rates
The Budget has proposed some relief for the middle class by halving the income tax rate for those having income of Rs 2.5-5 lakh to 5% from the present 10%.
Tax payers above the Rs 5 lakh bracket will get a maximum Rs 12,500 benefit for the tax cut.
A surcharge of 10% will be imposed on income between Rs 50 lakh to Rs 1 crore while it will be 15% above Rs 1 crore.
2. Corporate tax rate
The Budget also proposed slashing corporate tax rate to 25% from 30% for companies with turnover up to Rs 50 crore.
MAT will not be abolished but extended credit period to 15 years from the 10 years.
3. Cap on political donations
There might be a political debate over the Budget proposal for capping cash donation by an individual to a political party at Rs 2,000, one-tenth the present level of Rs 20,000 amount.
Jaitley has ruled out rolling back the proposal and said political parties can take donations from donors through cheque and digital payments.
The government also proposes to amend the RBI Act for issuing electoral bonds.
4. Higher investment in infrastructure
The government’s capital expenditure will be hiked by 25.4% in 2017-18, which will lead to faster economic growth.
Jaitley has allocated Rs 3.96 lakh crore for infrastructure including Rs 2.41 lakh crore in transport sector. The government plans to spend Rs 1.31 lakh crore for railways and Rs 64,000 crore investments in roads. The government proposed creation of a rail safety fund of Rs 1 lakh crore over the next five years.
5. PSU share sale, ETFs
The government targets Rs 72,500 crore from disinvestment of public sector companies including listing of Railway PSUs--IRCTC, IRCON and IRFC.
The finance ministry is also expected to come out with a procedure for a time-bound listing of CPSEs.
Jaitley also indicated to consolidation option for PSUs and a new CPSE Exchange Traded Fund (ETF) in 2017-18.