Budget 2018: Income tax, 5 more things that will be most tracked in FM’s Jaitley’s speech
FISCAL DEFICIT: All eyes will be on the fiscal consolidation roadmap and the government’s borrowing plans. Will Jaitley stick to the 3 percent (of GDP) fiscal deficit target for 2018-19 set last year? Or will he signal a move to fiscal deficit range from fixed target. There is heightened expectation that he may announce a new framework suggesting a fiscal deficit range from 2018-19 setting the stage for replacing the Fiscal Responsibility and Budget Management (FRBM) Act with a new law, giving the government more flexibility on borrowing and spending.
LTCG: Will he bring back the long-term capital gains tax (LTCG) in stock markets? Or will he change the definition of “long-term,” raising the time limit for tax relief to a minimum of 2-3 years from one year at present. Or will it be a status quo? Markets and investors will be hoping for the third option, for either a changed definition of long-term or a tax on gains from stock trading could trigger correction in markets as it will force many individuals and institutional funds to shuffle their stocks portfolio.
CORPORATE TAX: Will Jaitley cut the headline corporate income tax rate from 30 percent? In 2015, the finance minister had said that main corporate income tax rate will be progressively brought down to 25 percent by 2019. He may well chose his fifth, and the NDA government’s last full budget, in its current term to overhaul of India’s corporate tax structure by slashing the statutory rate and removing layers of exemptions