Here Are Five Changes in Income Tax Rules, Proposed in Union Budget 2018-19
Here Are Five Changes in Income Tax Rules, Proposed in Union Budget 2018-19
Here Are Five Changes in Income Tax Rules, Proposed in Union Budget 2018-19
2) A standard deduction of Rs. 40,000 has been proposed to be introduced for salaried
individuals in Budget 2018. About 2.5 crore salaried employees and pensioners would
benefit from this proposal and it would cost the government around Rs. 8,000 crore,
according to the finance minister. According to Budget proposals, salaried individuals
will get a standard deduction of Rs. 40,000 on income in place of the present exemption
allowed for transport allowance and reimbursement of miscellaneous medical expenses.
Standard deduction allows for a flat deduction from income of a salaried individual
towards expenses an employee would incur in relation to his or her employment.
Standard deduction, which was earlier available to the salaried individuals on their
taxable income, was abolished with effect from assessment year 2006-07.
(Read: Standard deduction reintroduced for salaried individuals)
3) Finance Minister Arun Jaitley in Budget 2018 announced a new tax of 10 per cent on
long-term gains from investing in stock markets and equity mutual funds. Under the
proposed new tax, profits of more than Rs. 1 lakh from stock and equity mutual fund
investments held over one year will be taxed at 10 per cent. At present, profits from
stock and equity mutual fund investments held for more than 12 months are tax exempt.
However, long-terms capital gains made on investments up to January 31, 2018, will not
be taxed. (Read: In Budget 2018, 10% tax announced on long-term capital gains
from stocks, equity mutual funds)
5COMMENTS
4) The finance minister also introduced a 10 per cent tax on distributed income by
equity-oriented mutual funds at the rate of 10 per cent.
5) For senior citizens, the government has announced a number of measures that will
help ease their tax burden: Exemption of interest income on deposits with banks and
post offices to be increased from Rs. 10,000 to Rs. 50,000, hike in deduction limit for
health insurance premium and/or medical expenditure from Rs. 30,000 to Rs. 50,000
under section 80D and TDS not required to be deducted under section 194A and benefit
also available for interest from all fixed deposit schemes and recurring deposit
schemes.
o much joy of tax payers in the lower brackets of income tax, Finance Minister Arun Jaitley has
relaxed the chargeable rates.
Personal income tax in Rs 2.5 lakh - 5 lakh bracket has been reduced to 5 per cent from 10 per cent.
Jaitley further announced that there will be zero tax liability to people having annual income up to Rs
3 lakh to avoid duplication of benefits for the Rs 2.5-R 5 lakh tax slab.
Also read: Highlights of Arun Jaitley's Union Budget 2017-18 speech in Parliament
Earlier, the tax slabs had caps at annual income of Rs 2.5 lakh, Rs 5 lakh and Rs 10 lakh attracting
income tax of 10 per cent, 20 per cent and 30 per cent respectively.
Those with annual income between Rs 50 lakh to Rs 1 crore will be levied a surcharge of 10 per cent.
The 15 per cent surcharge on incomes above Rs 1 crore will continue to be charged.
After today's announcement the following tax slabs will be applicable:
Higher
Income Education
Annual Income Education
Tax Cess
Cess
Rs 2.5-5 lakh 5% 2% 1%
+ 10%
Above Rs 50 lakh 30%
surcharge
Above Rs 1 crore