7 tax changes in ITR

Individual taxpayers are now required to file income tax returns electronically with an exception of super senior citizens who can file it in paper form

Here is a quick look at 7 tax rules that you will have to follow this year (FY 18 -19) while filing INCOME TAX RETURN

1.

 Income Tax Slabs & Rates for Individual Tax Payers & HUF

Income Tax Slabs Tax Rate for Individual & HUF Below the Age Of 60 Years
Up to ₹2,50,000* Nil
₹2,50,001 to ₹5,00,000 5% of total income exceeding ₹2,50,000
₹5,00,001 to ₹10,00,000 ₹12,500 + 20% of total income exceeding ₹5,00,000
Above ₹10,00,000 ₹1,12,500 + 30% of total income exceeding ₹10,00,000

Income Tax Slabs for Senior Citizens (60 Years Old or More but Less than 80 Years Old)

Income Tax Slabs Tax Rate for Senior citizens aged 60 Years But Less than 80 Years
Income up to Rs 3,00,000* No tax
Income from Rs 3,00,000 – Rs 5,00,000 5%
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

Income Tax Slabs for Super Senior Citizens(80 Years Old Or More)

Income Tax Slabs Tax Rate for Super Senior Citizens (Aged 80 Years And Above)
Income up to Rs 5,00,000* No tax
Income from Rs 5,00,000 – 10,00,000 20%
Income more than Rs 10,00,000 30%

Note: An additional 4% Health & education cess will be applicable on the tax amount calculated as above.

2. LTCG on equity investments

It is the reintroduction of the long term capital gains tax on stock market investments. A 10% Long Term Capital Gains (LTCG) tax will be applicable on profits exceeding 1 lakh made from the sale of stocks and equity-oriented mutual funds that have been held for over a year. Indexation benefit will be available on shares.
While Ulips are exempt from this tax.

3. Standard deduction

There is a standard deduction of Rs 40,000 for salaried employees, but it also did away with the tax exempt transport allowance of Rs 19,200 and medical reimbursement of Rs 15,000. Even pensioners can avail this benefit.

4. Tax advantages for senior citizens

There is a good news for senior citizens, who depend on interest income. The exemption limit on income from interest for those over 60 has been hiked five times from Rs 10,000 to Rs 50,000 per year. All deposits held by senior citizens across both banks and co-operative banks, as well as post offices will be eligible for this exemption. 
Another important benefit extended to senior citizens is that of the higher limit of deduction for health insurance premium and medical expenditure. This amount has been raised from Rs 30,000 to Rs 50,000 under Section 80D of the Income Tax Act. The deduction limit for medical expenses for specified critical illnesses under section 80DDB, has been hiked to Rs 1 lakh for all senior citizens from Rs 60,000 (in case of senior citizens) and Rs 80,000 (for super senior citizens). 

5. NPS exemption for the self employed

Till now, only salaried employees were allowed withdraw up to 40% of their total accumulated fund from the National Pension Scheme (NPS) at maturity or account closure, without any tax implications. But now, self-employed people are also eligible for this benefit. This move will bring non salaried people of the NPS at par with salaried employees. 

6. Longer lock-in for bonds under 54EC

Profits from the sale of land or building which are held for at least two years become tax-free if they are invested in specified bonds under Section 54EC. The lock-in period of investments in capital gain tax exemption bonds has been extended from three years to five years. 

7.Hike in education cess on income tax

Although it is only a nominal increase, the hike in the education cess means all taxpayers will have to pay a little more tax than they used to. The cess on income tax has been increased by 3% to 4%.

The last date of filing income tax return is 31st of july,2019. However the extension of the date is expected.

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