Tuesday, 13 February 2018

See details from the 10 income tax rules that will change from April.

10 Income Tax Rules That Will Change From April Details Here
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In 2018, the basic income tax rates and slabs were kept unchanged.

But many changes were announced which would affect many taxpayers.

New long-term capital gains tax on Equity, Equity MFs was announced.

In Budget 2018, Finance Minister Arun Jaitley has kept original income tax rates and slabs are unchanged. However, they have proposed several income tax changes which will affect many taxpayers. The changes announced in the budget of 2018 - from long-term capital gains tax on shares and equity mutual funds for relief for senior citizens on interest income, are many. The Finance Minister also introduced a standard deduction for salaried employees, especially those who are in the low tax slab, they will benefit. He has also proposed to increase the cess, on which the income tax payable amount is paid. Most of these changes will be effective from 2018-19

There are 10 changes in proposed income tax laws in the budget of 2018:

1) RS 40,000 standard deduction started: This additional deduction has been proposed at the place of the current deduction, transportation allowance and Rs. For the 19,200 medical reimbursement, 15,000 will benefit 25 million salaried employees. Pensioners, who usually do not enjoy any allowance for transportation and medical expenses, will also benefit from it. After the start of the standard deduction, the salaried class will enjoy a deduction of Rs 40,000 from their taxable income. Standard deduction for salaried individuals was previously available, unless it was terminated from the assessment year 2006-07. Benefits from standard deductions depend on the tax bracket, which comes in a salaried person

(Read 40,000 standard deduction presented: How it affects your income tax)

2) High Cess: For the individual taxpayers on income-payable amount, the Finance Minister also increased the tax on income tax by 4%.

 3) Introduction of long-term capital gains tax on equity investment: A new 10 percent tax (cess extra) will be applicable on the capital gains of over Rs. 100,000 on the sale of equity shares or units of equity-oriented funds. However, for the benefit of tax payers, till 31st January, 2018 the benefits are increasing. This means that on January 31, 2018 only tax will be levied on profits and prices.

(Share long term capital gains tax, stock explanation on mutual funds)

4) Income tax on dividend income from Equity Mutual Fund: Dividends distributed by equity oriented mutual funds will be taxed at the rate of 10 percent.

5) More income tax benefits on single premium health insurance policy: If you pay premium for a few years then health insurers typically offer some rebates, but first, a person could claim deduction up to Rs 25,000 only. Under the proposed changes in budget 2018, in case of single premium health insurance policy covering more than one year, deduction will be allowed on a proportionate basis for the number of years for which the health insurance cover has been provided, specified Subject to the limit. For example, if you make a payment, your insurer is giving 10% discount on health insurance premium, under the 40,000 proposed changes for the two-year cover, the person will get Rs. Can claim 20,000 in two years
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