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BUDGET 2018 - INCOME TAX IMPLICATIONS
Cess on personal income tax increased to 4 per cent from 3 per cent. Tax liability goes up.
Salaried individuals will get a standard deduction of Rs. 40,000 on income in place of the present exemption for transport allowance and reimbursement of miscellaneous. medical expenses. Standard deduction allows a flat deduction from the income of a salaried individual towards expenses that would incur in relation to employment.
A new tax of 10 % on long-term gains from investment in stock markets and equity mutual funds. Profits of more than Rs. 1 lakh from stock and equity mutual fund investments held over one year will be taxed at 10 %.. A 10 per cent tax on distributed income by equity-oriented mutual funds.For Senior Citizens : 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 U/s 80D.
TDS not required to be deducted U/s 194A and benefit also in interest from all FD amd RD deposit schemes.
General Category (less than 60 years age) Income upto : Rs. 2.5 lakhNil Rs. 2,50,001-Rs. 5 lakh - 5% . Income tax rebate of up to Rs. 5,000 reduced to Rs. 2,500 and will be available for taxable income of upto Rs. 3.5 lakh. On a taxable income of Rs. 3 lakh, net tax liability will be zero (tax @5% on Rs. 50,000 is Rs. 2,500 minus rebate of Rs. 2,500).
Rs. 500,001- Rs. 10 lakh - 20%
Above Rs. 10 lakh - 30%For income between Rs. 5-10 lakh, a tax of 20 % will be applicable and for income above Rs. 10 lakh a tax rate of 30 % will be applicable. On a taxable income of Rs. 50 lakh but less than Rs. 1 crore, a surcharge of 10 % along with the tax of 30 %. On a taxable income of Rs. 55 lakh, tax liability will Rs. 16.57 lakh (income tax of Rs. 14.62 lakh plus surcharge of Rs. 1.46 lakh and education & higher education cess of Rs. 48,263). If taxable income is more than Rs.1 crore, the surcharge will be 15% tax plus edn and higher edn cess of 3%. On taxable incomes where surcharges are applicable, tax payers marginal relief benefit, if applicable.
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