1. RE-INTRODUCTION OF STANDARD DEDUCTION
In a relief to the Salaried Class, the finance minister has re-introduced standard deduction of Rs. 40,000 from salary income. Such deduction is also available to PENSIONERS .
2. CESS HIKED TO 4%
Cess on the tax liability has been increased by 1%. this cess will be called "Health and Education Cess."
3.TRANSPORT ALLOWANCE AND MEDICAL REIMBURSEMENT TO BECOME TAXABLE
4. HIKE IN THE DEDUCTION LIMIT ON MEDICAL EXPENDITURE
Under section 80 D, the limit has been proposed to be hiked from Rs.30,000 to Rs.50,000 for individual above 60 years of age.
The deduction for individual below 60 years of age continues to be Rs.25,000 but if their parents are senior citizen, they can claim an additional deduction of Rs.50,000-Taking total deduction of Rs.75,000. Similarly, under section 80DDB limit has been hiked to Rs.1,00,000 for senior and super senior citizens.
5.TAX-EXEMPTIONS ON NPS CORPUS FOR SELF EMPLOYED.
For self employed ,it has been proposed to exempt 40% of total amount payable from tax upon closure of national pension scheme to bring self employed individuals at par with salaried class.
6. DIVIDEND DISTRIBUTION TAX ON EQUITY MUTUAL FUNDS.
DDT @10/% will be levied in case of equity mutual funds. however, dividend will remain tax free in hands of investors and the tax will be deducted by the fund houses before distribution of dividend.
7. 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.
8. 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.
In a relief to the Salaried Class, the finance minister has re-introduced standard deduction of Rs. 40,000 from salary income. Such deduction is also available to PENSIONERS .
2. CESS HIKED TO 4%
Cess on the tax liability has been increased by 1%. this cess will be called "Health and Education Cess."
3.TRANSPORT ALLOWANCE AND MEDICAL REIMBURSEMENT TO BECOME TAXABLE
4. HIKE IN THE DEDUCTION LIMIT ON MEDICAL EXPENDITURE
Under section 80 D, the limit has been proposed to be hiked from Rs.30,000 to Rs.50,000 for individual above 60 years of age.
The deduction for individual below 60 years of age continues to be Rs.25,000 but if their parents are senior citizen, they can claim an additional deduction of Rs.50,000-Taking total deduction of Rs.75,000. Similarly, under section 80DDB limit has been hiked to Rs.1,00,000 for senior and super senior citizens.
5.TAX-EXEMPTIONS ON NPS CORPUS FOR SELF EMPLOYED.
For self employed ,it has been proposed to exempt 40% of total amount payable from tax upon closure of national pension scheme to bring self employed individuals at par with salaried class.
6. DIVIDEND DISTRIBUTION TAX ON EQUITY MUTUAL FUNDS.
DDT @10/% will be levied in case of equity mutual funds. however, dividend will remain tax free in hands of investors and the tax will be deducted by the fund houses before distribution of dividend.
7. 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.
8. 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.
