New Tax Laws Help You To Save More This Tax Season: This Is How?

Subscribe to GoodReturns
For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

    The new rules introduced in the Budget 2018, allow you to save more this tax planning season. Know them again here for your ready-reference:

    New Tax Laws Help You To Save More This Tax Season: This Is How?
     

    1. Increase in tax benefit on premium against health insurance for parents: The deduction limit was enhanced from the earlier Rs. 30,000 to Rs. 50,000. And the move is likely to benefit both the senior citizens who pay such high premiums themselves or taxpayers pay on behalf of their senior citizens aged 60 years or more.

    Beginning FY 2018-19 deduction for premium paid for self, spouse, children and parents upto Rs. 75,000 can be claimed as against the previous allowed amount of up to Rs. 55,000.

    Also, in a case when both the individual as well as his or her parents are aged over 60 years, the deduction now allowed is up to Rs. 1 lakh.

    So, here is put forth the savings that can be made if you fall in the different tax slabs and claim a deduction of Rs. 75,000 to this effect:

    Income tax slab rate Earlier tax savings Tax savings now
    5% Rs. 2750 Rs. 3750
    20% Rs. 11000 Rs. 15000
    30% Rs. 16500 Rs 22500

    Also, if your parents are not covered under any medical insurance scheme, then under the provisions of section 80D, you can claim a maximum deduction of Rs. 50,000 for medical expenses incurred on them.

    2. Increased rebated under Section 80DDB for specified illnesses in case of senior citizens:

    This section provides for the expenses incurred due to specific conditions such as chronic renal failure, full blown Acquired Immuno-Deficiency Syndrome (AIDS), Hematological disorders (Hemophilia, Thalassaemia) and so on. And individuals as well as HUFs can make a claim against any such expense.

    Here in a maximum deduction of up to Rs. 1 lakh is available. Herein till the previous year, the deduction up to Rs. 60,000 was allowed and in case of superior seniors, a deduction of up to Rs. 80,000 was allowed.

     

    And in case the treatment is for any of the dependent aged below 60 years, then the deduction is capped at Rs. 40,000

    So, herein by making the claim, individuals can save, the below as taxes:

    Income tax slab rate Earlier tax savings Tax savings now
    5% Rs 3000 Rs. 5000
    20% Rs. 12000 Rs. 20000
    30% Rs. 18000 Rs 30000

    3. Tax-savings due to reintroduction of standard deduction: The standard deduction benefit will also provide additional tax savings but this will be to an extent get negated due to extra cess of 4%.

    Income tax slab rate Earlier tax savings Tax savings now
    5% Rs 1710 Rs. 2000
    20% Rs. 6840 Rs. 8000
    30% Rs. 10260 Rs 12000

    4. Interest exemption upto Rs. 50000 on interest to senior citizens: This is as per the new section 80TTB in which senior citizen is allowed a deduction of up to Rs. 50,000 for interest received on deposits which previously as per section 80TTA was limited to Rs. 10,000.

    Income tax slab rate Earlier tax savings Tax savings now
    5% Rs. 500 Rs. 2500
    20% Rs. 2000 Rs. 10000
    30% Rs. 3000 Rs 15000

    GoodReturns.in

    Story first published: Friday, January 18, 2019, 12:13 [IST]
    Company Search
    Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

    Find IFSC

    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more