Budget 2018 was certainly one of the give and take – however it become greater take than give, mainly for the taxpayer. On the one hand, Arun Jaitley reintroduced standard deduction, gave senior residents a few reasons to cheer, and elevated take home pay of ladies in the team of workers. On the other hand, he took away the medical and tour allowances of the salaried class, introduced long-term capital profits tax on equity, or even hiked the cess you pay on Income Tax.
Here are 10 personal finance takeaways from the government’s fifth and last budget
No changes in Income Tax slabs for people
stating that the government had made many superb changes in the private income-tax price relevant to individuals within the last three years, Jaitley left the profits tax slabs unchanged this finances.
Cess on Income Tax increased to 4%
Budget 2018 has proposed to hike the cess on earnings tax from 3 to 4 percent thereby growing the tax payable by means of all classes of tax payers. due to this modification, the tax liability for highest tax bracket (assuming Rs 15 lakhs earnings) is going up by using Rs 2,625. For center profits tax payers (between Rs five lakhs and Rs 10 lakhs) the tax legal responsibility will increase by using Rs 1,one hundred twenty five and for lowest tax brackets (Rs 2.5 lakhs to Rs 5 lakhs) with the aid of Rs 125.
Standard deduction reintroduced
Budget 2018 has proposed to offer a fashionable or standard deduction of Rs 40,000 from profits income to personnel. It is largely a flat quantity subtracted from the income earnings earlier than the calculation of taxable profits. This deduction became part of the Income-Tax Act until EX-finance minister, P. Chidambaram, who withdrew it in the Union budget of 2005-06.
Medical reimbursement and Travel allowance knocked out from your salary
It also proposes to cast off present annual transport allowance of Rs 19,200 and Rs 15,000 medical reimbursement. Prima facie earning exempted from tax after putting off the benefit and loss is Rs 5,800 only. The tax stored for each personnel on this income would rely on the tax slab that income falls into. Therefore, individuals with income above Rs.5 lakhs could come to be shelling out more tax after taking into account the standard deduction, the removal of the allowances and the growth in cess.
EPF contribution of recent women workers capped at 8%
Women joining the team of workers for the very first time will must make contributions only 8% instead of 12% or 10% because the case may be, for the 1st 3 years. The proposed move will beautify their take-home pay. Further, for new personnel coming under the ambit of EPFO might be furnished 12 percent contribution from the Government.
LTCG exceeding Rs.1 lakh to be taxed at 10%
The Financial Minister in his budget 2018 speech proposed to re-introduce Long-Term Capital Gains (LTCG) tax on gains bobbing up from the transfer of listed equity stocks exceeding Rs 1 Lakh at 10%, without allowing any indexation benefit. However, all profits as much as January 31, 2018 might be exempt.
Section 80D limit proposed to be hiked to Rs 50,000 for senior citizens
The restrict of deduction under section 80D for senior citizens has been proposed to be hiked Rs 30,000 to Rs 50,000. This is ideal information for senior citizens.
Exemption of interest income on deposits to be increased for senior citizens
And it has been proposed to hike the exemption on the interest earnings on bank and post office deposits for senior citizens from Rs. 10,000 to Rs. 50,000. that is for all Fixed Deposits and Recurring Deposits.
Finance Minister proposes DDT on equity MF, dividend seekers to be hit
It’s been proposed to introduce a dividend distribution tax on equity-oriented mutual funds at the charge of 10 percent, to provide a stage field across growth orientated and dividend dispensing schemes. This lessens the investor’s in-hand return.
Budget proposes to hike PMVVY limit to Rs.15 lakhs
More excellent news for senior citizens. The Finance Minister has proposed to hike the investment restrict the pension scheme, Pradhanmantri Vaya Vandana Yojana (PMVVY), to Rs.15 lakhs from Rs 7.5 lakhs.
Source via EconomicTimes.IndiaTimes
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