Remember These Changes In Income Tax Rules When Submitting Tax-Saving Proofs

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    This is the time of the year when you are asked to submit the various tax-saving investment and expenses that qualify for deductions etc. to adjust the TDS amount to be charged on your salary of the last 3 months of the financial year.

    Remember These Changes In Tax Rules When Submitting Tax-Saving Proofs
     

    But herein you need to remember the different changes enacted this year and declare proofs to your employer accordingly:

    1. Transport allowance: Until the previous year, without producing the original or actual expenditure slips, you were allowed a deduction of up to Rs. 19,200 against travel allowance but no longer this rebate remains available. Nonetheless, individuals with disabilities of lower order, and those who are blind, deaf or dumb as well as orthopedically challenged, are allowed deduction of up to Rs. 38,400 in a year.

    Sometimes conveyance allowance is provided by the employer and this can be still claimed up to the extent of actual expenses against conveyance charges when on official duty. And it shall not be accommodated in employee's CTC.

    2. Medical reimbursement: From the FY 2018-19, the allowance provided for medical expenditure has also been removed which until the previous year stood at Rs. 15000. It is to be remembered that this claim was also allowed without producing actual medical expenses receipt etc.

    3. Standard deduction: Now, after doing away with medical and travel reimbursement, the centre has introduced standard deduction of Rs. 40,000 or salary amount, whichever is less to be deducted from gross salary. But as this is compensation over and above the travel and medical reimbursement, the net gain is Rs. 5,800 only. Also, this gets reduced further due to hike in education and health cess. This amount notably is charged to the total tax payable and this has seen an increase from 3% to 4%.

    4. Long term capitals gain Tax on Equity: In the Union Budget 2018, govt. also introduced 10% LTCG tax on all equity related investments amounting to over Rs. 1 lakh. It is to be noted that LTCG implications arise after the equity related instrument is sold after it is being held for over a year.

     

    5. DDT: Dividend of up to Rs. 10 lakh in a year remains tax-free but beyond this a rate of 10% is deducted as DDT or dividend distribution tax even before the distribution of dividend to the equity or equity fund holder.

    6. Contribution of Govt in EPF: Hereon, in case of private sector employees, earning up to Rs. 15,000 a month, government will be contributing 12% of the eligible salary (basic pay+ DA) in EPF account for first three years. And, if you do not withdraw the contribution before 5 years, the amount shall be tax-free in the hands of the employee.

    Goodreturns.in

    Read more about: standard deduction ltcg ddt
    Story first published: Thursday, December 13, 2018, 11:11 [IST]
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