In the Union Budget some of the tax changes proposed if they are passed through will either turn positive , negative or neutral for taxpayers. So, before the law actually gets implemented its better you make note of to better understand the course of your financials.
Here are four such changes in the tax structure that will begin to be effected from April 1, 2018 after Parliament passes the proposals.
1. Higher cess:
On the amount of income tax there is a cess amount that is payable and in the Union Budget 2018, the percentage of this amount has been raised from 3% to 4%.
The current 3% levy is made up of 2% education cess and 1% senior secondary education cess. This amount is charged to all tax payers . And with it tax liability of all taxpayers goes up.
2. Standard deduction of Rs.40000 provided to salaried class:
The standard deduction which was withdrawn away few years back has again been reinstated and is available to both salaried class as well as pensioners. Also, benefits which shall then be accrued as a result of it would solely depend on the tax bracket in which the taxpayer falls.
Read about: How you will save tax through standard deduction
3. Taxation on medical reimbursement as well as travel expenditure:
Until now, there has been exemption to the tune of Rs. 15000 and Rs. 19200 respectively for travel allowance and medical expenses incurred by the employee on an annual basis. But with the passage of the proposals in the Parliament, tax liability shall then be in place for both these account heads as well. And will be charged depending on the taxation slab of the taxpayer concerned.
4. LTCG on equity capital gains:
LTCG has also been reinstated @ 10% on equity capital gains over Rs. 1 lakh though with a grandfathering clause. That is any gains realized till January 31, 2018 have been made exempt. Equity oriented mutual funds who make any dividend payments shall now on be taxed @ 10% in the hands of the investors.
Deductions and Exemptions benefitting senior citizens
It is to be noted that senior citizens has been the most benefitted class in the Union Budget 2018 and the different benefits rendered to them can be noted here.