Do you think the union budget just flew past you? Let’s find out the key highlights that you missed in this year’s budget.
Tax-related proposals which made the headline are as follows:
- One good news for salaried individuals and HUFs is the reintroduction of standard deduction which covers a tax deduction of Rs 40,000. The catch here is it will substitute the income tax deductions on account of Conveyance allowance and Medical Reimbursement, for which the tax-exemptions allowed were up to Rs 19,200 and Rs 15,000 a year, respectively.
- Many of us were expecting a populist change in the income tax rates, but there are no amendments proposed in the income tax slabs for Assessment Year 2018-19.
- Also, a 10% tax will be charged on long-term capital gains (LTCG) of over Rs 1 lakh. The lone silver lining here is that LTCG assets sold before January 31, 2019, will be exempt from such tax which is also known as the grandfathering of the asset.
- For senior citizens, interest income will now be exempt from taxes if the annual income is less than Rs 50,000. Medical insurance premiums for them can go up to Rs 50,000 without incidence of a tax.
- For women, the mandatory EPF contribution has been reduced from 12% to 8% for the first three years.