10 Key Income Tax Rules That’ll Come Into Effect From April 1
On February 1, Finance Minister Arun Jaitley introduced a number of changes while presenting Budget 2018 Union. These changes said to bring an impact to the income tax you will have to pay this year, ranging from taxing long-term capital gains on investment in stocks as well as equity mutual funds.
While presenting Budget 2018 Union FM Jaitley in Budget 2018 did not really change the income tax rates for different slabs. However, here are a number of changes that will surely impact the income tax you pay after the income tax will come into effect from April 1, 2018.
1. For Budget 2018-19, Arun Jaitley has proposed to increase in personal income and corporation tax from 3% to 4%.
2. A good news for salaried individuals as there is a possibility of an introduction of standard deduction of Rs 40,000 from their income in Budget 2018. About 2.5 cr salaried employees and pensioners in India will be allowed to avail the benefit of this deduction.
3. As of lately, employees are being provided the medical reimbursement of Rs 15,000 in a year and the transport allowance of Rs 19,200. Both are exempted from the tax. However, starting from April 1, 2018, these 2 allowances will become a taxable part of your salary.
4. Currently, there’s a levied charge of cess 3% Education, Secondary and Higher Education Cess. However, according to the proposed budget, both Health, as well as Education Cess, will be levied at 4% of income tax from April 1.
5. Under the current provision, the deduction for medical treatment of senior citizens is limited to Rs 60,000 and Rs 80,000 is a maximum limit of expenses when it comes to very senior citizens.
6. From April 1 very senior citizens can claim a deduction of Rs 30,000 for payment as their medical expense. The finance minister has proposed a deduction senior citizens can also claim the deduction for medical expenditure.
7.Under the new budget, the Section 54EC is proposed. This section will restrict the exemption in respect of capital gain arising from the transfer of a long-term capital asset. The benefit of the redeemable period specified bonds that is of 5 years will also be extended.
8. The budget has also brought good news for investors, as under the proposed new tax, profits earned by the investors of more than Rs 1 lakh from stock and equity mutual fund investments within one year will be taxed at 10%. In fact. LTCG made on investments up to January 31, 2018, will not be taxed.
9. The exemption of interest income on deposits with banks and post offices to be increased from Rs 10,000 to Rs 50,000.
10. For people who have single premium health insurance, the Budget 2018 has proposed a scheme where the policies having the term of more than a year should be allowed the deduction on a proportionate basis for the number of years for which the cover is provided, subject to the specified monetary limit.