financial services

Union Budget 2018-19: Impact on Individuals

  1. The government has made PAN mandatory for anyone entering into a monetary transaction of Rs 2.5 lakh or more.
  1. Customs duty on mobile phones has been increased from 15% to 20%. This will upset the mobile buyers who are planning on buying a mobile brand which is imported into India.
  1. EPF mandatory contribution for women has been reduced from 12% to 8% for the first three years.
  1. More people are going to benefit from the Ujwalla Yojna as the government has targeted provision of free LPG connections to 8 crore women.
  1. National Health Protection Scheme which aims to ensure 10 crore families health care up to 5 lakh rupees per family per year.
  1. Farmers are likely to get some relief as the minimum price for crops offered to them is going to increase.
  1. The health and education cess has been increased to 4 percent from 3 percent. As it applies to all goods and services, this will make almost everything a little more expensive.
  1. A 10% tax will be charged on long-term capital gains (LTCG) over Rs 1 lakh. The only plus side here is that LTCG assets sold before January 31, 2019, will be exempt from such tax, which is also known as grandfathering of the asset.
  1. For senior citizens, interest income will now be exempt from taxes for an annual interest-income up to Rs 50,000 as opposed to up to Rs 10,000 previously. Medical insurance premiums for them can go up to Rs 50,000 without any tax liability. And, in the case of critical illness, the deduction can go up to Rs 1 lakh per year.
  1. Standard deduction, which allows for a fixed deduction from salaried individual’s income towards the expenses an employee incurs, for an amount of Rs 40,000 has been introduced in the union budget. This will replace the current exemption allowed for transport allowance and reimbursement of miscellaneous medical expenses.

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