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.

Customs duty increase on mobile phones to incentivise domestic value addition and promote local manufacturing and jobs.
The Budget adjusts customs policy to encourage domestic value addition by raising customs duty on mobile phones, certain mobile parts and specified television parts while reducing the duty on raw cashew to support local processing, aiming to make domestic products more competitive and to foster job creation and supply chain development.

E-assessment scheme shifts income-tax assessments to electronic mode, reducing taxpayer-officer interface and enhancing transparency.
Amendments to the income-tax statute propose notification of a scheme for assessment in electronic mode, enabling assessments, notices, and interactions to be conducted digitally to reduce direct taxpayer-officer interface and improve administrative efficiency and transparency through a nationwide roll-out following pilot expansion.

Long term capital gains tax introduced at a fixed rate, grandfathering existing gains and taxing fund distributions.
Proposal to tax Long Term Capital Gains on listed equity shares, units of equity-oriented funds and business trust units above a specified exemption threshold at 10% without indexation, with gains up to 31 January 2018 grandfathered; and to impose a 10% tax on distributed income of equity-oriented mutual funds to equalise treatment between growth and dividend funds, justified by revenue broadening and removal of a bias favoring financial asset investment.

Corporate Bond Financing: proposal to require large corporates to raise part of funding from bond markets, with regulatory reforms.
Proposal to require large corporates to source a prescribed portion of financing from the bond market, supported by RBI guidelines and SEBI consideration to deepen bond issuance and market access. Proposed reforms include lowering eligible bond rating thresholds from AA to A, reforming stamp duty on securities via amendments to the Indian Stamp Act, establishing a unified IFSC financial services regulator, and monetising selected public assets through InvITs and ReITs with IIFCL support.

Budgetary support to defence prioritized; industry-friendly defence production policy to boost domestic manufacturing and private participation.
Ensuring adequate budgetary support to the defence sector is declared a government priority to support modernization and indigenous production. The Government opened private investment and liberalised foreign direct investment in defence production, will develop two defence industrial production corridors, and will issue an industry friendly Defence Production Policy 2018 to promote domestic production across public sector, private sector and MSMEs.

Ease of doing business reforms deepened through targeted state actions and a national single window logistics portal to integrate stakeholders.
Implementation of a national programme of business reforms to deepen the ease of doing business by operationalising 372 targeted simplification actions across States, with progress evaluated by user feedback. Concurrently, the Government is expanding digital single window and e governance infrastructure: a National Logistics Portal as a single window marketplace, a Central Public Procurement Portal and Government E Marketplace for unified procurement, and a web based Government Integrated Financial Management Information System for financial administration.

Fiscal Deficit target set as operational parameter; Debt Rule adoption to reduce debt-to-GDP ratio in budget framework.
The Budget anchors fiscal management on a specified fiscal deficit target to be financed through borrowings, with increased expenditure to support priority sectors; the Government accepts key FRBM Committee recommendations including adoption of a Debt Rule and measures in the Finance Bill to reduce the Central Government's debt-to-GDP ratio and to use the Fiscal Deficit target as the principal operational parameter.

Insurance coverage expansion under social schemes reaches millions; government commits to extend coverage to all poor households.
Government social protection measures expanded insurance and savings coverage: a life insurance scheme with nominal premium access for enrolled families and a personal accident insurance scheme offering standardized cover; the government will extend these protections to all poor households and use basic banking accounts to deliver microinsurance and unorganised sector pension schemes. A child-focused small-savings vehicle for female children has grown to over one crore accounts, and the administration plans to bring all basic accounts into the inclusion framework to facilitate welfare service delivery.

Earmarked allocation for Scheduled Castes and Scheduled Tribes increased, strengthening targeted budgetary provision for welfare programmes.
Earmarked allocation for Scheduled Castes and Scheduled Tribes under central budgetary programmes has been increased across successive fiscal years, reporting higher reserved funding across hundreds of programmes and further upward revisions proposed in the budget estimates for the coming year as a central-government financing decision to strengthen programme-level resource targeting for social welfare and development measures.