Tax filing season has already begun and the last date for those who are not required to be audited remains July 31, 2019, until any further announcement. While you are getting ready, all the required financials in place here is a quick reckoner in relation to the changes that need to be kept in mind, once you get on to compute your tax liability for the FY 2018-19 or AY 2019-20.
1. Health and education cess hiked to 4%:
Earlier, the cess charged on tax liability and surcharge was at 3% which has gone up by 1% to 4% now. Now the additional 1% is due to health as well as education, which previously was earmarked to 2% for education and the remaining 1% of senior and higher secondary education cess.
2. Standard deduction from salary income:
A standard deduction of up to Rs. 40,000 is allowed to a salaried taxpayer in lieu of transport and medical allowance. But the handicapped individual will also continue to get transport allowance of Rs. 3,200 per month in addition to the standard deduction benefit.
3. Section 80TTB deductions to senior citizens:
Under the new section, a deduction up to Rs. 50,000 will be provided to senior citizens for interest earnings on bank or post office deposit.
4. Health insurance benefit increased to Rs. 50,000 for senior citizens as part of section 80D:
Senior citizens will now be allowed a deduction of Rs. 50,000 for the premium paid towards health insurance of an elderly or preventive health check-up.
5. Tax on the long-term capital gain from transfer of listed equity shares:
Earlier till Ay 2018-19, there was no ltcg implication on sale of listed shares if such transaction was chargeable to Securities Transaction Tax (STT). But now, if the gains exceed Rs. 1 lakh, the tax at the rate of 10% will be charged.
And for the cost of acquisition, if the asset has been bought before February 1, 2018, then higher of the 2 values can be taken i.e. actual cost of acquisition of equity shares/units or lower of FMV of such asset as on 31-01-2018 or full value of consideration received as a result of transfer of such assets.