UNION BUDGET 2018- For Individuals

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”

 

Budget Proposal	Existing Provision	Proposed Amendment
Standard Deduction for Tax Payers	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	Standard deduction up to Rs.40,000/- for salaried taxpayers Consequently, existing conveyance allowance & medical reimbursement benefits to be withdrawn
Deductions available to senior citizens on health insurance premium and medical treatment	Deduction allowed up to Rs.30,000/- p.a. u / s 80D	Existing deduction limit to be increased to Rs.50,000/-
Enhanced deduction to senior citizens for medical treatment of specified diseases	Deduction allowed up to Rs.60,000/- for senior citizens & Rs.80,000/- for super senior citizens u/s 80DDB	Existing deduction limit increased to Rs.1,00,000/- for both senior & super senior citizens
Deduction of interest income from deposits held by senior citizens	Section 80TTA allows deduction up to Rs 10,000/- in respect of interest income from savings account to all taxpayers	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/-
New Pension Scheme (NPS) tax free withdrawal limit	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	It is proposed to extend the said tax-free withdrawal benefit to all subscribers of NPS
LTCG on sale of equity shares	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)	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