Financial Budget 2018 brought many kinds of amendments in taxation. Although there was no major relief given to middle class people. Still having a good knowledge of some specific changes from 1st April onwards is important for everyone!
In Budget 2018, there was no major change in tax slab rates. However it imposed new cess, i.e, Health & Education cess at the rate of 4% of income tax, including surcharge, in place of Education, Secondary and Higher Education cess @ 3% from financial year 2018-19.
For salaried employees, this budget has proposed a transport and medical allowance deduction of maximum Rs. 40000.
In Section 80DDB, the deduction is given to individuals and HUFs for expenditure related to specified diseases like Cancer, TB, etc. Earlier the deduction was of Rs. 60000. However from now onwards, this is raised to Rs.100000.
As per Section 80TTA, the deduction of Rs.10000 was given for interest income from deposits held with banks, cooperative society and post office.
From Financial year 2018-19, the deduction of Rs.50000 will be provided to senior citizens for above mentioned deduction.
In Section 80D, earlier the maximum deduction of Rs.30000 was allowed to individual and HUFs for medical insurance, along with another deduction of Rs.5000 towards health check-ups. Alternatively very senior citizens can claim Rs.30000 for health check-ups.
From the present year, it is proposed to allow maximum deduction of Rs.50000. Senior citizens can also claim the above described, i.e, of Rs.30000 for medical expenditure.
Earlier an employee contributing to NPS was allowed 40% exemption of total amount payable to him on closure of account or his opting out. This was not allowed to non-employee subscribers.
Now this scheme will be available to every type of subscribers.
Now 10% tax will be charged on long term capital gain on sale of Equity-oriented Mutual funds and Equity shares in case of Capital gain exceeding Rs.100000 in a year. Also no benefit of indexation will be given.
In Section 54EC, earlier the deduction was available in respect of capital gain arising from sale of long term asset and investing the same in long term specified bonds within 6 months after date of transfer.
Now this section is restricted for capital gain arising from sale of land or building or both and not on other assets. Also in order to avail the deduction the specified bonds must be locked for 5 years.
In case of single premium health insurance, having more than one term period, the deduction will be allowed for proportionate basis, subject to specific monetary limits.