Dividend distribution tax on equity oriented mutual funds imposed on distributed income creating parity with growth funds.
Amendment requires a mutual fund that qualifies as an equity oriented fund, as defined under the new capital gains provision, to pay additional income-tax on income distributed to its unit holders, aligning tax treatment between dividend-paying and growth-oriented equity funds; the change is effective from the start of the next fiscal year.

Long-term capital gains on listed equity subject to a new concessional tax where securities transaction tax conditions are met.
Long-term capital gains on transfer of listed equity shares, units of equity oriented funds, and units of business trusts are brought into a new concessional tax regime subject to securities transaction tax conditions; indexation and foreign-currency computation benefits are disallowed, pre-cut-off acquisitions receive a deemed cost treatment using fair market value, equity oriented funds are defined by minimum equity investment thresholds, fair market value is fixed by reference to a specified valuation date or net asset value, and Chapter VIA deductions and the section 87A rebate are to be applied after reducing income by such capital gains.

Dividend distribution tax extended to deemed dividends, making companies liable for tax and collection on disguised payouts.
Amendment brings deemed dividends within the dividend distribution tax regime by deleting the Explanation to Chapter XII-D so that distributions referred to in sub clause (e) of clause (22) of section 2 are subject to dividend distribution tax under section 115 O. Such deemed dividends will be taxed at 30 per cent without grossing up, with the amendment applying prospectively to transactions undertaken on or after the commencement date specified by the amendment.

Accumulated profits definition expanded to include amalgamating company profits, widening dividend tax base and curbing amalgamation tax avoidance.
The amendment provides that, for dividend purposes, accumulated profits of an amalgamated company shall be increased by the accumulated profits of the amalgamating company, whether capitalised or not, on the date of amalgamation, thereby preventing use of amalgamation and capital reduction to circumvent tax on distributions and applying from the notified effective date.

Permanent Account Number as Unique Entity Number: non-individuals and designated representatives must obtain PAN to enable transaction linkage.
Non-individual entities undertaking financial transactions above a prescribed annual threshold must apply to the Assessing Officer for allotment of PAN to serve as a Unique Entity Number, and specified senior representatives or persons competent to act for such entities must also obtain PAN to enable linkage of entity transactions with natural persons; the amendment takes effect from 1st April, 2018.

Tax rates and surcharge framework updated, including marginal relief and a new health and education cess replacing prior cesses.
Rates for assessment year 2018-19 set slabbed income-tax rates for individuals with higher basic exemptions for senior citizens, entity-specific corporate rates including a concessional domestic company rate for qualifying turnover, and graduated surcharge regimes with marginal relief to limit surcharge increases on incomes crossing thresholds. TDS rates generally mirror the prior year, except for a new TDS obligation on long-term capital gains at a specified flat rate. The erstwhile education cesses are replaced by a consolidated Health and Education Cess levied on tax inclusive of surcharge, to which marginal relief does not apply.

Long-term capital gains taxation: proposed withdrawal of exemption and introduction of a concessional charging mechanism clarified by FAQs.
Proposed amendments withdraw the existing exemption for long-term capital gains on specified equity-class assets and introduce a new charging provision imposing a concessional tax on such gains above a threshold; the CBDT has issued FAQs to clarify scope, covered asset classes and the interaction of the new charging mechanism with existing Securities Transaction Tax.

GST compensation transfers classified outside tax administration, funded by cess and not a net central revenue outgo.
Specified amounts presented under "Tax administration" in the Union Budget 2018-19 consist of Transfers to States for GST compensation; these Transfers are to be financed from imposition of a cess and therefore do not involve any net outgo from revenues accruing to the Centre and do not form part of expenditure on tax administration.

Health protection scheme cashless coverage for vulnerable families; central funding assured with insurance or trust implementation options.
The planned nationwide health protection initiative will provide cashless inpatient coverage for poor and vulnerable families through public and selected private hospitals, operating on either an insurance or trust model. The scheme is affirmed as entirely state funded with an initial allocation and a commitment to supply additional funds as needed during rollout next financial year. Fiscal support for ongoing funding is projected from expected increases in direct tax and broader tax collections, and implementation will require central-state cooperation and attention to health infrastructure capacity.

Fiscal policy adjustment increases public investment and expands health and social protection to support inclusive growth.
The Budget reorients fiscal policy toward agriculture, rural economy, social sectors and employment by prioritising public investment and revising the fiscal deficit target to address transitional revenue shortfalls from tax reform; it also proposes the National Health Protection Scheme, allocates funds to health, education and social protection, and pursues disinvestment and debt to GDP reduction measures to support macroeconomic stability.

Significant economic presence nexus expands tax jurisdiction over digital non residents for income attributable to Indian transactions.
The Finance Bill, 2018 amends the Income tax Act to broaden the tax base and adjust rates and surcharges, replace prior education cesses with a Health and Education Cess, expand PAN and reporting obligations for non individual entities and key persons, and introduce administrative measures including a new scrutiny assessment scheme. Key substantive changes include taxing long term capital gains on listed equity and certain fund units under a new provision, applying dividend distribution tax to deemed dividends, widening the definition of accumulated profits for amalgamations, and recognising a significant economic presence nexus for taxation of income attributable to digital or remote activities in India.

Union Budget 2018-19 prioritises infrastructure investment, tax-administration reform, MSME formalisation and expanded social sector schemes.
Union Budget 2018-19 increases capital expenditure and sets programmatic initiatives for railway and airport modernisation, tourism development, and infrastructure financing; implements tax-administration reforms including e-assessment and customs amendments; proposes gold as an asset class and regulated exchanges; advances MSME formalisation, a national logistics portal and unique enterprise IDs; funds large education and health schemes and agriculture programmes; and presents fiscal aggregates with revenue, capital and fiscal deficit projections to align reallocations and financing measures.

Customs duty revisions: notifications adjust basic customs duty, cess and surcharge exemptions following budget proposals.
Amendments to customs notifications adjust effective rates of Basic Customs Duty, increase duty on specified silk fabrics, alter rates on parts of mobile phones and electronic goods, rescind prior exemption notifications, and modify levy and exemptions of Education Cess, Secondary and Higher Education Cess and the Social Welfare Surcharge, including treatment of integrated tax and GST compensation cess on imports.

Capital gains exemption for non-resident transfers in IFSC expands market access while concessional AMT applies to non-corporate taxpayers.
Transfers of derivatives and specified securities by non-residents in the International Financial Services Centre are exempt from capital gains tax, and non-corporate taxpayers operating in IFSC will be charged Alternate Minimum Tax at a concessional rate aligned with the minimum tax applicable to corporates.

Circle rate adjustment: no adjustment when circle rate closely matches consideration, easing tax burden on property transfers.
To reduce hardship from valuation disparities in immovable property taxation, the Budget proposes that no adjustment shall be made where the circle rate value does not exceed 5% of the consideration, preventing minor circle-rate differentials from generating additional taxable income for purchaser and seller.

Social Welfare Surcharge replaces education cesses on imports, applying to aggregate customs duties with specified exemptions.
Social Welfare Surcharge replaces the Education Cess and Secondary and Higher Education Cess on imported goods and is imposed as a percentage of the aggregate duties of customs to fund social welfare schemes. Goods formerly exempt from education cesses remain exempt from the new surcharge, and a specified list of imported goods is subject to a reduced surcharge rate as set out in the budget annexure.

Section 80-JJAA benefits extended to footwear and leather industry, relaxing minimum employment criteria to spur hiring.
Extension of Section 80-JJAA benefits to the footwear and leather industry relaxes the minimum employment-period threshold to align with the apparel sector, permitting those employers to claim the employment-linked deduction. The measure also rationalises deduction timing by allowing the additional deduction where a new employee works less than the minimum period in the first year but completes the required service in a subsequent year, thereby supporting sustained employment creation.

Restrictions on cash payments: cash payments above the prescribed limit disallowed and non-deduction triggers significant disallowance.
The Budget proposes that cash payments by trusts, institutions and similar entities exceeding Rs. 10,000 shall be disallowed as expenditure and taxed, and that in cases of non-deduction of tax a 30% disallowance of the amount shall apply and be taxable, to strengthen audit trails and improve TDS compliance.

Agency renaming: Central Board of Excise and Customs renamed as Central Board of Indirect Taxes and Customs after GST.
The Central Board of Excise and Customs will be retitled as the Central Board of Indirect Taxes and Customs, reflecting GST implementation; the name change is proposed to be effected through amendments to existing statutes via the Finance Bill and requires formal legislative alteration to take legal effect.

Timelines for adjudication and pre-notice consultation introduced to streamline customs dispute resolution and reduce litigation.
Proposed Customs Act amendments require pre-notice consultation before formal notices, institute definite timelines for adjudication, and provide for deemed closure of cases where timelines are missed, aligning procedures with Trade Facilitation Agreement commitments to streamline dispute resolution and reduce litigation.