$. Reintroduction of Standard Deduction
Budget 2018 has introduced standard deduction of Rs 40,000/- for salaried taxpayers. The good thing is this would be applicable for pensioners too. This deduction can be availed without submission of any proofs.
$. Transport Allowance & Medical Reimbursement no more Tax-free
With the introduction of the standard deduction, the Transport Allowance & Medical Reimbursement would no longer be tax-free. Currently, the transport allowance was tax-free up to Rs 19,200/- and medical reimbursement up to Rs 15,000/-. Net of these allowances and introduction of standard deduction salaried taxpayers have additional tax exemption of only Rs 5,800/-.
Download:- Automated Income Tax Form 16 Part B for F.Y. 2018-19 [ This Excel Utility can prepare One by One Form 16 Part B for F.Y. 2018-19 ]
$. Cess on Taxes hiked to 4% (Health and Education Cess)
There has been NO change in the income tax slabs in Budget 2018. However, from FY 2018-19 the existing cess of 3% (Education, Secondary and Higher Education Cess) has been increased to 4% and named Health and Education Cess.
Download Automated Income Tax Form 16 Part A&B and Part B for F.Y. 2018-19 [ This Excel Utility can prepare One by One prepare both of Form 16 Part A&B and Part B for F.Y. 2018-19 ]
$. Increased tax exemption on interest income for senior citizens (80TTB)
Budget 2018 has introduced a new section 80TTB according to which senior citizens would be able to claim interest income up to Rs 50,000/- as tax-exempted income. However, if you take benefit u/s 80TTB then you cannot claim tax benefit on interest received on savings bank account u/s 80TTA.
Download Automated All in One TDS on Salary for Non-Govt Employees for F.Y. 2018-19 [ This Excel Utility can prepare at a time your Tax computed sheet + Salary Sheet + Individual Salary Structure + Automatic H.R.A. Calculation U/s 10(13A) + Form 12 BA + Automated Income Tax Form 16 Part A&B and Form 16 Part B for F.Y. 2018-19 ]
$. TDS limit on interest income increased for senior citizens u/s 194A
There is TDS (tax deduction at source) for almost all kind of income. However, as a relief to senior citizens, Budget 2018 has raised the limit for TDS on interest income from Rs 10,000/- to Rs 50,000/-. So TDS would only be applicable for senior citizens if the annual interest income from a bank/post office is more than Rs 50,000/-.
$. Tax deduction for Single Premium Health
Insurance Premium
In case assesses buy single premium health/medical insurance policy covering multiple years, the tax exemption u/s 80D would be available proportionately for all the years. For e.g., if you pay Rs 1,00,000/- premium for a health policy covering for 5 years, you can claim Rs 20,000/- tax exemption every year for 5 years subject to limits.
$. Increased deduction for medical insurance premium u/s 80D for senior citizens
The Medical Insurance premium and the preventive health check-up limit for senior citizens under section 80D has been increased from Rs 30,000 to Rs 50,000. This is good news in keeping with the ever increasing health care and related insurance costs.
Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y. 2000-01 to F.Y. 2018-19
$. Increased deduction for medical treatment u/s 80DDB for senior citizens
The deduction for medical treatment of specified critical illnesses has been increased to Rs 1 Lakh. Earlier the limit was Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens. Following illness are covered under section 80DDB:
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§ Neurological Diseases
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§ Parkinson’s Disease
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§ Malignant Cancers
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§ AIDS
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§ Chronic Renal failure
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§ Hemophilia
§ Thalassaemia
$. Extension of Partial Tax-exemption on NPS withdrawal to self-employed
Until now 40% of NPS corpus on withdrawal was tax exempted for employees. However, from FY 2018-19 this benefit has been extended to all NPS accounts.
The above changes would be applicable to the FY 2018-19. So make a note of the above and plan your investments and taxes accordingly.
