10 Income Tax rules will change from Apr 1..Everything you must know



New Delhi, March 30: Several budget proposals including the reintroduction of the tax on long-term capital gains(LTCG) exceeding Rs 100,000 from the sale of shares will kick in from April 1, the beginning of the 2018-19 financial year.

Besides, other tax proposals like reduced corporate tax of 25 per cent on businesses on turnover of up to Rs 250 crore and a standard deduction of Rs 40,000 in lieu of transport allowance and medical reimbursement will come into effect from Sunday.



While the exemption limit on income from interest for senior citizens has been raised five times to Rs 50,000 per year, the limit of deduction for health insurance premium and medical expenditure has been raised to Rs 50,000 from Rs 30,000 under section 80D of the I-T Act.

For senior and very senior citizens, the tax deduction for critical illness will be Rs 100,000 from April 1, as against the existing limit of Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens.

In the last regular Budget of the present NDA government, Finance Minister Arun Jaitley had retained the 10-15 per cent surcharge on the super-rich, while raising the health and education cess, levied on all taxable income, to 4 per cent from 3 per cent at present.

These proposals too will come into effect from Sunday.

The 2018-19 Budget had after a gap of 14 years reintroduced 10 per cent tax on LTCG exceeding Rs 1 lakh from sale of shares.

Currently, 15 per cent tax is levied on capital gains made on share sale within a year of purchase. However, it is nil for shares sold after a year of purchase.

However, indexation benefit for computing tax liability on the sale of shares listed after January 31 will be available, which will come as a relief to investors. In July 2004, the government had abolished LTCG tax on shares and replaced it with the securities transaction tax (STT) - a same-day tax credit system that continues.

Keeping the income tax rates and slabs unchanged, the Budget introduced a Rs 40,000 standard deduction for salaried employees and pensioners in lieu of the present exemption in respect of transport and medical expenses.

The standard deduction, which is provided to salary earners, was discontinued from the assessment year 2006-07. Presently, no tax is applicable on Rs 19,200 of transport allowance and medical expenditure of up to Rs 15,000. This has now been subsumed into the new standard deduction of Rs 40,000 which may mean very little benefit in tax saving considering that health and education cess has gone up.

With regard to corporate tax, the Budget has lowered the rate to 25 per cent for companies with the turnover of up to Rs 250 crore in 2016-17.

The changes will benefit the entire class of micro, small and medium enterprises which accounts for almost 99 per cent of companies filing their tax returns.

In 2015 Budget, Jaitley had promised to reduce corporate tax from current 30 per cent to 25 per cent over four years.

The Union Budget 2018-19 was the last full budget before the general elections next year, when a vote on account would be presented. The next full budget will be presented by the new government.

PTI

Don’t Miss

SC Bar Association blames Centre for interfering in judicial functioning
India-Pakistan WAR on June 16, 2019!!!
Wah..Airport like railway station in India this year..See PIC
PM launches Rashtriya Gram Swaraj Abhiyan
Asaram has always tamed controversy, know more about the verdict
Angry Iran won't let US hurt its economy, takes a vow
While BJP's Swamy hails VP's decision, Shiv Sena criticises the move
Cash for vote..Rs 41300000 cash, 4.52 kg gold seized in Karnataka
9 new ministers to take oath as Amarinder Singh to expand cabinet
Breaking: POSCO Act: Ordinance on death for child rapists gets a nod
IMF expects this from India
Sensex ends flat at 34,415.58; tech stocks RISE
18 Rohingyas arrested in Tripura for entering country illegally
BMW India launches third generation of SUV X3
Apple working on iPhone SE 2
Now you don't need a commercial licence for taxis and autos
Modi warns Pak from London,stop terror else face surgical strike..Rapes are worrisome, says PM
10 Points: Where has all the cash disappeared from ATMs
Govt asks SC to reconsider Justice Joseph recommendation
7-yr-old dies as school van-tempo collide at Kanhaiya Nagar metro station
Indu Malhotra 1st women lawyer to become SC judge, Joseph on hold
Yogi red-faced..BJP MLAs praise Samajwadi development work of a Yadav
Simply Superb! Five looks of Ranbir Kapoor as Sanjay Dutt will surprise you
This BJP leader blames porn behind rising child rape cases!
Amit Shah blasts Rahul..Save the Constitution=Save Gandhi Dynasty..Rahul is insulting Ambedkar
50 IIT alumni quit jobs to form political party, declare mission statement
A 14-year-old abducted and raped in a temple in Haryana
Major controversies of Asaram Bapu
Infant raped, killed in MP; 1 arrested
Amitabh Bachchan 'attacked'.. Details here

Most Recent

Most Popular