In Budget 2018, Finance Minister Arun Jaitley has kept the basic income tax rates and the slabs unchanged. However, he proposed a number of income tax changes that will impact many taxpayers.
Click here to download A quick review (Limited Information) summary copy of the applicable Income tax Rates income tax act after incorporating amendments proposed by the Budget of 2018 are given below for ready reference and information of our clients:‐
Some Relevant Amendments Introduced By Budget 2018 In Income Tax Act For Individuals
Standard Deduction of Rs.40,000 introduced for all salaried employees. Now salaried class will enjoy a flat
deduction of Rs. 40,000 from their taxable income.
Benefit of Transport Allowance of Rs.19,200 and Medical Reimbursement of Rs.15,000/‐ have been withdrawn.
Mediclaim / health insurance Premium ‐ Higher deduction limit of Rs. 50,000 under Section 80D of the Income
Tax Act for senior citizens (above 60 years of age). The earlier limit was Rs.30,000.
For individuals below 60 years of age, the deduction under Section 80D continues to be Rs.25,000.
Employees can claim Premium paid for parents who are senior citizens, above 60 years up to Rs. 50,000 can
claim additional to the deduction of up to Rs. 50,000‐taking the total deduction to Rs. 75,000 (Rs. 25,000 + Rs.
50,000). Until last year, this limit was Rs. 55,000.
Where assesse has paid Premium in one year for health insurance benefit spanning across multiple years, the
deduction will be available proportionately over the years to which the premium pertains.
Higher income tax deduction for senior citizens for medical treatment of specified diseases under section
80DDB. The deduction for payment towards medical treatment of specified disease has been increased to Rs.1
lakh for senior citizen and very senior citizen (over 80 years). Earlier this benefit was Rs.60,000 for senior citizen
and Rs.80,000 for very senior citizen.
Senior citizens will get higher interest income exemption limit on deposits in banks and post offices, including
recurring deposits. Currently, the deduction was Rs. 10,000 under Section 80TTA of the Income Tax Act to an
individual in respect of interest income from a savings account.
Now, a new Section 80TTB allows a deduction up to Rs. 50,000 in respect of interest income from deposits held
by senior citizens. However, senior citizens will not be able to claim deduction under Section 80TTA.
Tax on Capital Gains from sale of equity share ‐ new 10 per cent tax (cess extra) will be applicable on capital
gains exceeding Rs.1,00,000 upon sale of equity share or units of equity oriented funds.
Thank you!
CA Rajesh Mittal
