Budget 2018: Changes in Tax Rules
1. customary Deduction of Rs 40,000 for Salaried and Pensioners
2. Transport Allowance & Medical compensation No a lot of tax-exempt for salaried
3. Cess hiked from third-dimensional to four-dimensional (renamed as Health & Education Cess)
4. Rs 50,000 interest financial gain for senior voters tax exempted underneath newly introduced Section 80TTB
5. insurance Premium Tax exemption limit increased to Rs 50,000 u/s 80D for senior voters
6. increased deduction for medical treatment u/s 80DDB for senior voters up to Rs 1,00,000
7. 100% tax on long-run capital gains (above Rs one Lakh) on stocks & equity primarily based mutual funds. conjointly 100% dividend distribution tax obligatory on the dividend paid by equity mutual funds.
Mentioning Some Points I'm commonly asked
1. there's NO tax deduction on Infrastructure Bonds
2. there's NO separate tax block for Men We provide a transient of all the tax saving sections below:
1. Section 80C/80CCC/80CCD
These three square measure the foremost fashionable sections for tax saving and have the ton of choices to save lots of tax. the most exemption combining all the higher than sections is Rs one.5 lakhs. 80CCC deals with the pension product whereas 80CCD includes Central Government worker Pension theme.
You can choose between the subsequent for tax saving investments:
1. Employee/ Voluntary Provident Fund (EPF/VPF)
2. PPF (Public Provident fund)
3. Sukanya Samriddhi Account
4. National Saving Certificate (NSC)
5. Senior Citizen’s Saving theme (SCSS)
6. five years Tax Saving mounted Deposit in banks/post offices
7. life assurance Premium
8. Pension Plans from life assurance or Mutual Funds
9. NPS
10. Equity joined Saving theme (ELSS – popularly called Tax Saving Mutual Funds)
11. Central Government worker Pension theme
12. Principal Payment on the loan
13. taxation and registration of the House
14. Tuition Fee for two kids
PICTURE OF TAX block
2. Section 80CCD(1B) – Investment in NPS
Budget 2015 has allowed extra exemption of Rs 50,000 for investment in NPS. this is often continued this year too. we've got done a whole analysis that you'll browse by clicking the link below.
Investor Not: do you have to Invest Rs 50,000 in NPS to save lots of Tax u/s 80CCD (1B)?
3. Payment of interest on the loan (Section 24)
The interest paid up to Rs a pair of lakhs on loan for a self-occupied or rented house is exempted u/s twenty-four. Earlier there was NO limit on interest deduction on rented property. Budget a pair of 2017 has modified this and currently the tax exemption limit for interest paid on loan is Rs 2 lakhs, no matter it being self-occupied or rented. but for rented homes, any loss in more than Rs a pair of lakhs may be carried forward for up to seven years
4. Payment of Interest on Education Loan (Section 80E)
The entire interest paid (without any higher limit) on education loan in an exceedingly yr is eligible for deduction u/s 80E. but there's no deduction on principal acquired the Education Loan.
The loan ought to be for the education of self, relative or kids solely and will be taken for following full-time courses solely. The loan should be taken essentially from an approved trust or an institution solely.
The deduction is applicable for the year you begin paying your interest and 7 a lot of years forthwith once the initial year. therefore all told you'll claim education loan deduction for max eight years.
5. Medical insurance for Self and fogeys (Section 80D)
Premium acquired Mediclaim/ insurance for Self, Spouse, kids, and fogeys qualify for deduction u/s 80D. you'll claim the most deduction of Rs twenty 50,000 just in case you're below sixty years more matured and Rs 50,000 higher than sixty years more matured.
An additional deduction of Rs 25,000 may be claimed for purchasing insurance for your oldsters (Rs 50,000 just in case of either oldster being senior citizens). This deduction may be claimed no matter oldsters being enthusiastic about you or not. but this profit isn't obtainable for purchasing insurance for in-laws.
HUFs may also claim this deduction for premium acquired ensuring the health of any member of the HUF
6. Treatment of great unwellness (Section 80DDB)
The cost incurred for treatment of bound unwellness for self and dependents gets a deduction for tax. For senior voters the deduction quantity is up to Rs 1,00,000; whereas for all others its Rs forty,000. Dependent may be oldsters, spouse, kids or siblings. they ought to be entirely enthusiastic about you.
To claim the tax exemption you wish a certificate from a specialist from Government Hospital as proof for the upset and therefore the treatment. just in case the expenses are reimbursed by the insurance corporations or your leader, this deduction can't be claimed. In the case of partial compensation, the balance quantity may be claimed as a deduction
Diseases Covered:
1. medicine Diseases
2. Parkinson’s unwellness
3. Malignant Cancers
4. AIDS
5. Chronic failure
6. Hemophilia
7. Thalassemia
Download Automated House Rent Exemption Calculator U/s 10(13A)
8. Physically Disabled Tax remunerator (Section 80U)
Tax remunerator will claim deduction u/s 80U just in case he suffers from bound disabilities or diseases. The deduction is Rs 75,000 just in case of traditional incapacity (40% or a lot of disability) and Rs 1.25 Lakh for severe incapacity (80% or a lot of disability)
A certificate from specialist or Civil doc or Chief medical man of presidency Hospital would be needed as proof for the upset.
Disabilities lined
1. visual disorder and Vision issues
2. Leprosy-cured
3. Hearing impairment
4. locomotive incapacity
5. stupidity or malady
6. Autism
7. Cerebral Palsy
Also Read: a way to Calculate financial gain Tax? – explained with example
9. Physically Disabled Dependent (Section 80DD)
In case you've got dependent United Nations agency is otherwise abled, you'll claim a deduction for expenses on his maintenance and medical treatment up to Rs seventy-five,000 or actual expenditure incurred, whichever is lesser. The limit is Rs 1.25 Lakh for severe incapacity conditions i.e. eightieth or a lot of the disabilities. Dependent may be oldsters, spouse, kids or siblings. conjointly the dependent shouldn't have claimed any deduction for self incapacity u/s 80DDB.
To claim the tax deduction you'd like incapacity certificate issued by a state or central government medical board.
You can conjointly claim tax exemption on premiums acquired life assurance policy (in taxpayers’ name) wherever the disabled person is that the beneficiary. just in case the disabled dependent expires before the tax remunerator, the policy quantity is coming back and treated as a financial gain for the year and is absolutely rateable.
40% or a lot of the following incapacity is taken into account for purpose of tax exemption
1. visual disorder and Vision issues
2. Leprosy-cured
3. Hearing impairment
4. locomotive incapacity
5. stupidity or malady
10. Donations to Charitable establishments (Section 80G)
The government encourages North American country to give to Charitable Organizations by providing a deduction for a similar u/s 80G. Some donations square measure exempted for 100% of {the quantity the number} given whereas for others its five-hundredths of the given amount. conjointly for many donations, the most exemption you'll claim is prescribed to 100% of your gross annual financial gain. Please note that solely donations created in money or cheque square measure eligible for deduction. Donations in a similar way like giving garments, food, etc aren't lined for tax exemption.
How to Claim Sec 80G Deduction?
1. A signed receipt issued by the Charitable establishment for your donation is should
2. The receipt ought to have the license number issued by tax Dept written on that
3. Your name on the receipt ought to match thereupon on PAN range
4. conjointly {the amount the quantity the range} given ought to be mentioned each in number and words
Download Automated Income Tax Software All in One TDS on Salary for West Bengal Govt Employees for the Financial Year 2018-19 [ This Excel Utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Sheet + Individual Salary Structure as per the W.B.Govt Employees Salary Pattern + Automated Income Tax Form 16 Part A&B and Form 16 Part B for F.Y.2018-19]
11. Donations for research (Section 80GGA)
100% deduction is allowed for donation to the subsequent for research u/s 80GGC
1. To a research association or University, faculty or different establishment for the endeavor of research
2. To a University, faculty or different establishment to be used for analysis in science or applied math analysis
3. An association or establishment, the endeavor of any programme of rural development
4. To a public sector company or an area authority or to AN association or establishment approved by the National Committee, for completing any eligible project or theme
5. To the National Urban economic condition wipe-outs Fund originated
.
12. Donations to Political Parties (Section 80GGC)
100% deduction is allowed for donation to an organization registered underneath section 29A of the illustration of the individuals Act, 1951 u/s 80GGC. the most exemption you'll claim is prescribed to 100% of your gross annual financial gain
13. House Rent just in case HRA isn't a part of wage (Section 80GG)
In case, you are doing not receive HRA (House Rent Allowance) as a wage part, you'll still claim house rent deduction u/s 80GG. Tax remunerator could also be either salaried/pensioner or freelance.
To avail this you wish to satisfy the subsequent conditions:
1. The rent paid ought to be a lot of than10% of the financial gain
2. nobody within the family as well as relative, minor kids or self ought to own a house within the town you're living. If you own a house in several towns, you've got to think about income on a similar
The House Rent deduction is lower of the three numbers:
1. Rs. 5,000 per month [changed from in Budget 2016]
2. twenty-fifths of annual financial gain
3. (Rent Paid – 100% of Annual Income)
You need to fill type no 10BA together with the instrument type
More details @ Claim tax deduction for Rent Paid u/s 80GG
Along with the tax saving sections and investments for each salaried and business, it conjointly has details regarding all the common wage parts and their tax treatment. This section will assist you to arrange your wage parts just in case your company offers such a facility.
