Union
Budget 2018 had provided very little relief for individuals. There have been no
changes to tax slabs or rates for
individual taxpayers except for effective increase in the rate of cess by 1% as
“Health and Education cess”
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Budget Proposal
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Existing Provision
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Proposed Amendment
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Standard Deduction
for Tax Payers
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No standard
deduction separately for salaried taxpayers
Conveyance
allowance of Rs.19,200 p.a. & reimbursement of medical expense upto
Rs.15000/- p.a. exempt u/s 10
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Standard deduction
up to Rs.40,000/- for salaried taxpayers
Consequently,
existing conveyance allowance & medical reimbursement benefits to be
withdrawn
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Deductions
available to senior citizens on health insurance premium and medical
treatment
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Deduction allowed
up to Rs.30,000/- p.a. u / s 80D
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Existing deduction
limit to be increased to Rs.50,000/-
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Enhanced deduction
to senior citizens for medical treatment of specified diseases
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Deduction allowed
up to Rs.60,000/- for senior citizens & Rs.80,000/- for super senior
citizens u/s 80DDB
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Existing deduction
limit increased to Rs.1,00,000/- for both senior & super senior citizens
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Deduction of
interest income from deposits held by senior citizens
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Section 80TTA
allows deduction up to Rs 10,000/- in respect of interest income from savings
account to all taxpayers
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Proposed section
80TTB to allow deduction up to Rs 50,000/- for interest income from deposits
held by senior citizens
Consequently
section 194A to be amended to raise limit of deduction of tax at source (TDS)
on such interest income to Rs 50,000/-
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New Pension Scheme
(NPS) tax free withdrawal limit
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As per section
10(12A), an employee contributing to NPS is allowed an exemption in respect
of 40% of the total amount payable to him on closure / opting out of his
account
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It is proposed to
extend the said tax-free withdrawal benefit to all subscribers of NPS
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LTCG on sale of
equity shares
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LTCG arising from
transfer of long term capital assets, being equity shares of a company / unit
of equity oriented fund / unit of business trusts, is exempt from income-tax
under section 10(38)
Further, such
transactions carried out on a recognized stock exchange is liable to
securities transaction tax (STT)
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Section 112A
proposes to tax such LTCG @10% on amount exceeding Rs. 1 lakh
LTCG will be
computed without giving effect to:
−cost inflation
indexation
−and the benefit of
computation of capital gains in foreign currency in the case of a
non-resident
All gains up to 31
January, 2018 will be grandfathered
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