10 Income Tax Rules That Will Change From April. Details Here

10 Income Tax Rules That Will Change From April. Details Here


In Budget 2018, Finance Minister Arun Jaitley has kept the basic income tax rates and the slabs unchanged. However, he proposed a number of income tax changes that will impact many taxpayers. From a new long-term capital gains tax on stocks and equity mutual funds to relief for senior citizens on interest income – the changes announced in Budget 2018 are many. The finance minister also introduced a standard deduction for salaried employees which will, particularly, benefit those who are in lower tax slabs. He also proposed an increase in cess, which is charged on the amount of income tax payable. Most of these changes will be effective from FY 2018-19.

Here are 10 changes in income tax laws proposed in Budget 2018:

1) Rs. 40,000 standard deduction introduced: This additional deduction has been proposed in place of existing deductions of Rs. 19,200 for transport allowance and Rs. 15,000 for medical reimbursement. This will benefit 2.5 crore salaried employees. Pensioners, who normally do not enjoy any allowance for transport and medical expenses, will also benefit from it.  After the introduction of standard deduction, the salaried class will enjoy a flat deduction of Rs.40,000 from their taxable income. Standard deduction was earlier available for salaried individuals previously, till it was abolished with effect from assessment year 2006-07.  The benefits arising from standard deduction depends on the tax bracket a salaried individual falls in.

2) Higher cess: The finance minister also raised cess on income tax to 4 per cent from 3 per cent for individual taxpayers on the amount of income tax payable.

3) Introduction of long-term capital gains tax on equity investments:  A new 10 per cent tax (cess extra) will be applicable on capital gains exceeding Rs. 1,00,000 upon sale of equity share or units of equity oriented funds. However, for the benefit of tax payers, the gains till January 31, 2018, are being grandfathered. This means that only gains over January 31, 2018, prices will be taxed.

4) Tax on dividend income from equity mutual funds:  A tax at the rate of 10 per cent will be levied on dividend distributed by equity-oriented mutual funds.

5) More income tax benefits on single premium health insurance policies: Health insurers typically provide some discount if you pay premium for a few years upfront. But earlier, an individual could claim deduction only up to Rs. 25,000. Under the proposed changes in Budget 2018, in case of single premium health insurance policies having cover of more than one year, deduction will be allowed on a proportionate basis for the number of years for which health insurance cover is provided, subject to the specified limit. For example, your insurer is offering a 10 per cent discount on health insurance premium if you pay Rs. 40,000 for the two-year cover. Under the proposed changes, the individual can claim Rs. 20,000 in both years.

6) Income tax benefit on NPS withdrawal: The government has proposed an extension to the benefit of tax-free withdrawal from NPS (National Pension System) to non-employee subscribers.  Currently, an employee contributing to the NPS is allowed an exemption in respect of 40 per cent of the total amount payable to him or her on closure of account or on opting out. This exemption is currently not available to non-employee subscribers. The extension of tax-free withdrawal to non-employee subscribers will be available from financial year 2018-19.

7) Deduction in respect of interest income to senior citizens: Senior citizens will get higher interest income exemption limit on deposits in banks and post offices, including recurring deposits.  Currently, a deduction up to Rs. 10,000 is allowed under Section 80TTA of the Income Tax Act to an individual in respect of interest income from a savings account. Under the tax laws, a new Section 80TTB is proposed to be inserted to allow a deduction up to Rs.50,000 in respect of interest income from deposits held by senior citizens. However, no deduction under Section 80TTA shall be allowed for senior citizens.

The government also proposed to increase the investment limit in Pradhan Mantri Vaya Vandana Yojana or PMVVY to Rs. 15 lakh from Rs. 7.5 lakh. It also proposed to extend the Pradhan Mantri Vaya Vandana (PMVVY) scheme till March 2020. Pradhan Mantri Vaya Vandana Yojana, a scheme meant for senior citizens, offers a guaranteed interest rate of 8 per cent.

8) Higher TDS or tax deducted limit for senior citizens: The threshold for deduction of tax at source on interest income for senior citizens is proposed to be hiked from Rs. 10,000 to Rs.50,000.

9) Higher deduction limit under Section 80D of the Income Tax Act for senior citizens: In Budget 2018, the government proposes to increase the deduction for senior citizens on payment of health insurance premiums. The limit is set to go up from Rs. 30,000 Rs. 50,000. For individuals below 60 years of age, the deduction under Section 80D continues to be Rs. 25,000. But if their parents are senior citizens, above 60 years, they can claim an additional deduction of up to Rs. 50,000-taking the total deduction to Rs. 75,000 (Rs. 25,000 + Rs. 50,000), higher than the current limit of Rs.55,000.

10) Higher income tax deduction for senior citizens for medical treatment of specified diseases:  The deduction available payment towards medical treatment of specified disease is proposed to be hiked to Rs. 1 lakh for very senior citizen (earlier Rs. 80,000) and senior citizen (earlier Rs. 60,000).


Source by:- ndtv

54 Replies to “10 Income Tax Rules That Will Change From April. Details Here”

    1. Thank you. T.D.S on income from home and also pension is being collected @10%. Are there no instructions from the Dept. to reduce it to 5%, as the I.T rate is reduced to 5% upto Five lakh rupees.

  1. This knowledge is essential to know all citizen of India as the Indian tax payer filling their return through return filler i.e account which have no so knowledge.

    1. Sincere apologies for the mails. do send your email id and it will be removed. you should have unsubscribe from the mail itself.

    2. Hi Amit
      Are you educated ? Will you send messages with some decency , be care your language , if you want to unsubscribe then you should know that you can do it on your own , have basic discipline and never ever send note like this and that will reflect on you

  2. A doubt, please…..During current year if taxable income of a taxpayer is less than Rs.500000, flat Rs.5000 tax computed is deducted. Is it available next fiscal year onwards?

  3. There is one clarification I want to know: The PMVVY is enhanced to Rs. 15 lakh from Rs. 7.5 lakh. Pls note that the Rs. 7.5 L limit earlier was for the “Whole Family”. But the new limit of Rs. 15 L is for every “Senior Individual” (the Govt statement says so). Pls clarify.

  4. Limit under 80D has gone up to Rs. 50000 for senior citizens. Apart from insurance premium, is other medical expense also covered? For example treatment for a non specified illness, Endoscopy,Colonoscopy, etc.
    Will appreciate clarification

  5. Tanks for thedetails. From this year I need not B wasting my hardearned value depleting money on auditors filing my NIL return. Iam avery Sr. citizen. Are these exemptions mentioned in ur details , in addtion to the 5 lacs pa. Pl clarify.

  6. मंत्री महोदय से निवेदन है कि वेतन भोगी लोगों पर और अन्य लोगों के बजाय जो बिना आयकर फाईल किये लक्जरी गाड़ियों का उपयोग करते हैं जिनकी एक गाड़ी की किमत ही एक वेतन भोगी व्यक्ति की वार्षिक आय से अधिक होती है ऐसा कर ढांचा होना चाहिए कि जो गाड़ी दस बीस लाख रुपये किमत की या इससे ज्यादा की खरीद करता है और आयकर फाईल नही करता है उन लोगों की आय का श्रोत पता लगाना चाहिए। बड़े बड़े शोरूम से सीधे डाटा लेना चाहिए कि बीस लाख से अधिक किमत की किसने खरीदी और उसकी आय का जरिया क्या है।

  7. काही प्रमाणात ही माहिती हिंदी किंवा मराठीत पाठवली तर जरा सोपे जाईल समजायला
    मला तर इंग्लिश कमी येते पण
    CO ला पण तुमचे काही SMS समजत नाही ना
    काही प्रमाणात तरी हिंदी पाठवा
    अजून हिंदी भाषा बंद नाही झाली अजून

  8. I am unable to understand the philosophy behind giving sops from next fiscal year. By giving exemption from the last quarter of the present fiscal year the senior citizens will be be better benefitted to pay for their medical necessities. When liquor, cigarettes etc.are charged from the very evening while earning for the Government, why the benefits shouldn’t be transferred the same way. SURESH KOTESHWAR.

    1. Wonderful observation very Correct Why the benefit should not be passed in the same year as revenue is collected. BTW as its becoming more burdenful on Govt to service @ 60 years it’s Suggested from next FY 2019-20 for men it’s 65 & 60 for women is going to be the senior citizen Creteria as its already decided by TTD temple for free Durshan.

  9. If TDS for Sr Citizens is enhanced to 50000 for Deposits I think no Form 15 H/ G is necessary to be filled former 1st April 2018 onwards.

  10. Is the Standard Deduction applicable nly to Salaried Class and retired people who earn PENSION?
    What about those who retired from Private Companies and do not get any Pension. Are they not eligible for this benefit?

  11. Can I be briefed for a query,? What if a person who earns our if INTRADAY equity trading and not from ling holdings of such equities is thus income for an non salaried, non senior citizen categorised as just 8bcone fir an individual or under capital gains.

    Thanks and regards

    1. It’s but natural all short term Capital gains where you don’t hold underlying Equity for 1yr or Above is taxed @ 15% as LTCG is taxed @ 10% here after. Good decision in Long run as 31st Jan Cutoff rates are recorded as exempt.

  12. 1. What will be process of getting Standard Deduction of Rs 40000 by Pensioners? Requires elaboration.

    2. The Tax structure by Govt appears to be erratic. When LTCG were considered as exempted income in earlier years, why tax on that now. Having Understood the earlier rule many persons invested in Equity or Equity MFs. Now a tax imposed on that which might have disturbed financial planning of many. This also gives negative signal to FIIs.

    3. The reason for removal of Tax benefits under Section 80TTA i.e income from SB Accounts in not appreciable. Logic that Rs 50000 Tax exemption given under New Section 80TTB for interest on FDs with Bank & PO is no reason for Withdrawal of Provisions under Section 80TTA. Are Sr Citizens not suppose to have SB accounts. ?

  13. Is Standard Deduction of Rs40000/ applicable to Pensioners? I think it is only for Salaried People.Plz clarify.

  14. Instead of getting proof, standard deduction may be increased and flat tax system may be introduced (like professional tax). Which helps more in simple in system and paper less work. Thanks. N. SRINIVASAN

  15. Hi i have a logistics company in dubai and i have done a door to door freight for an Indian company eg i picked materials from UK and delivered to my client in India…i raised Invoice for freight…clearing…rententation charges…trucking from Indian port to the destination within India…now my client from India says they will deduct TDS@30% and remit me the balance they were talking about section195j…can anyone pls advice as i kept knly 2% margin on actuals and billed my client as thia was my first order…if 30% is deducted i will be in loss 28%…pls advice

  16. Thanks for a very useful information on new income tax rules,but it should be more simplified and clarified with proper examples please.

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