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UNION BUDGET PROPOSALS FY 2018-19
Budget Proposals 18-19 and Insurance Policies :
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax of the persons who purchase and pay premiums on insurance policies will be affected in the following manner :
1. No change in the rebate available under 80 c for purchasing life insurance policies .
2.For senior citizens , Tax rebate on Medical insurance taken is enhanced to Rs 50,000 from existing Rs 30,000 .
3. For single premium health insurance policies purchased covering more than one year , proportionate deduction can be taken each year for the payment done at a single time , subject to the limit available. Earlier maximum proportional limit was Rs 25 ,000 . Health insurers typically provide some discount if you pay premium for a few years upfront. But earlier, an individual could claim deduction only up to Rs. 25,000.
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax of the persons who purchase and pay premiums on insurance policies will be affected in the following manner :
1. No change in the rebate available under 80 c for purchasing life insurance policies .
2.For senior citizens , Tax rebate on Medical insurance taken is enhanced to Rs 50,000 from existing Rs 30,000 .
3. For single premium health insurance policies purchased covering more than one year , proportionate deduction can be taken each year for the payment done at a single time , subject to the limit available. Earlier maximum proportional limit was Rs 25 ,000 . Health insurers typically provide some discount if you pay premium for a few years upfront. But earlier, an individual could claim deduction only up to Rs. 25,000.
Budget Proposals 18-19 and Investment in Equities / Mutual funds ETC :
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax of the persons investing / trading in financial instruments like Equities , bonds or Mutual Funds will be affected in the following manner :
1. Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is introduced at 10 % , flat and uniform rate for gains more than Rs 100,000 in the financial year . Further no indexation allowed for calculating the gain . However gains earned up to January 31, 2018 will be allowed to grandfathered . Grandfathering is allowing of existing benefits for the previous period . Hence Long Term Profits earned after February 1, 2018 will only be taxed if profits are booked in the financial year 2018-19 i.e from 01.04.2018 to 31.03.2019 . The higher of the purchase price of share or mutual fund or the price as on 31st Jan , 2018 for equity and NAV as on 31st , Jan 2018 will be taken as investment cost for arriving the long term gain .
2. Dividend Distribution tax of 10 % to be paid on equity mutual funds . The tax at 10 % will be deducted from the dividend to be paid by the AMC of mutual fund before giving credit to the investors .
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax of the persons investing / trading in financial instruments like Equities , bonds or Mutual Funds will be affected in the following manner :
1. Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is introduced at 10 % , flat and uniform rate for gains more than Rs 100,000 in the financial year . Further no indexation allowed for calculating the gain . However gains earned up to January 31, 2018 will be allowed to grandfathered . Grandfathering is allowing of existing benefits for the previous period . Hence Long Term Profits earned after February 1, 2018 will only be taxed if profits are booked in the financial year 2018-19 i.e from 01.04.2018 to 31.03.2019 . The higher of the purchase price of share or mutual fund or the price as on 31st Jan , 2018 for equity and NAV as on 31st , Jan 2018 will be taken as investment cost for arriving the long term gain .
2. Dividend Distribution tax of 10 % to be paid on equity mutual funds . The tax at 10 % will be deducted from the dividend to be paid by the AMC of mutual fund before giving credit to the investors .
Budget Proposals 18-19 and Salaried Persons :
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax for Salaried persons will be affected in the following manner :
1. Income tax rates kept unchanged . However like all others , salaried persons have to bear an additional education cess of 1 % on tax from exiting 3 % changed to 4 %
2. Benefit on introduction of standard deduction of Rs 40,000 . However transport allowance of Rs 19,200 and medical reimbursement of Rs 15,000 will not be available for Fy 2018-19 . Hence net difference is only Rs 5800 for those who are already availing transport allowance and medical reimbursement .
For salaried persons who also invest in stock markets and mutual funds
1. Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is introduced at 10 % for gains more than Rs 100,000 . Further no indexation allowed for calculating the gain . However gains earned up to January 31, 2018 will be allowed to grandfathered . Grandfathering is allowing of existing benefits for the previous period .
2. Dividend Distribution tax of 10 % to be paid on equity mutual funds .
For salaried persons who are also senior citizens
1. Interest on deposits with post offices and banks will be exempted for an amount of Rs 50,000 which is presently Rs 10,000 only for savings bank accounts under section 80TTA .
2. No TDS under section 194 a of income Tax act for interest paid to senior citizens .
However Form 15 H to be submitted .
3. Tax rebate on Medical insurance taken by senior citizens is enhanced to Rs 50,000 from existing Rs 30,000
4. Increase in deduction limit for expenses incurred on certain critical illness is increased to Rs 100,000 from existing Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens
5. Limit of investment will be increased to Rs 15 lakhs from existing Rs 7.5 lakhs under Pradhan Mantri Vayovandana Yojana . Further the scheme will be extended up to March 2020 .
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax for Salaried persons will be affected in the following manner :
1. Income tax rates kept unchanged . However like all others , salaried persons have to bear an additional education cess of 1 % on tax from exiting 3 % changed to 4 %
2. Benefit on introduction of standard deduction of Rs 40,000 . However transport allowance of Rs 19,200 and medical reimbursement of Rs 15,000 will not be available for Fy 2018-19 . Hence net difference is only Rs 5800 for those who are already availing transport allowance and medical reimbursement .
For salaried persons who also invest in stock markets and mutual funds
1. Long Term Capital Gain Tax on sale of equity shares and equity oriented mutual funds is introduced at 10 % for gains more than Rs 100,000 . Further no indexation allowed for calculating the gain . However gains earned up to January 31, 2018 will be allowed to grandfathered . Grandfathering is allowing of existing benefits for the previous period .
2. Dividend Distribution tax of 10 % to be paid on equity mutual funds .
For salaried persons who are also senior citizens
1. Interest on deposits with post offices and banks will be exempted for an amount of Rs 50,000 which is presently Rs 10,000 only for savings bank accounts under section 80TTA .
2. No TDS under section 194 a of income Tax act for interest paid to senior citizens .
However Form 15 H to be submitted .
3. Tax rebate on Medical insurance taken by senior citizens is enhanced to Rs 50,000 from existing Rs 30,000
4. Increase in deduction limit for expenses incurred on certain critical illness is increased to Rs 100,000 from existing Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens
5. Limit of investment will be increased to Rs 15 lakhs from existing Rs 7.5 lakhs under Pradhan Mantri Vayovandana Yojana . Further the scheme will be extended up to March 2020 .
Budget Proposals 18-19 and Senior Citizens :
The effect of budget proposals for the financial year 2018-19 to be implemented by the government , personal income tax for Senior citizens will be affected in the following manner :
1. Interest on deposits with post offices and banks will be exempted for an amount of Rs 50,000 which is presently Rs 10,000 only for savings bank accounts under section 80TTA .
2. No TDS under section 194 a of income Tax act for interest paid to senior citizens .
However Form 15 H to be submitted .
3. Tax rebate on Medical insurance taken by senior citizens is enhanced to Rs 50,000 from existing Rs 30,000
4. Increase in deduction limit for expenses incurred on certain critical illness is increased to Rs 100,000 from existing Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens
5. Standard deduction of Rs 40,000 allowed on pensions received by senior citizens .
6. Limit of investment will be increased to Rs 15 lakhs from existing Rs 7.5 lakhs under Pradhan Mantri Vayovandana Yojana . Further the scheme will be extended up to March 2020 .
Note : Income tax rates kept unchanged . However like all others , senior citizens have to bear an additional cess of 1 % on tax from exiting 3 % changed to 4 %
HIGHLIGHTS OF BUDGET PROPOSAL FY 2018-19
Mr Arun Jaitley , Finance Minister presented his budget proposals for the financial year 2018-19 on 1st Feb , 2018 . If implemented , following aspects of your personal finance :
1. Export of Agriculture products to be liberalised
2. Free housing for all by 2022
3. MSP of crops to be increased by 1.5 times of the production cost
4. New Health care system for poor with Rs 5 lakhs cover
5. 8 Crore BPL women to get free LPG connection
6. Tax burden for MSME to be reduced
7. Medical college for every three parliamentary constituencies
8 3.3% Fiscal deficit projected for Fy 18-19
9. Salary of president & governors to be increased
10 .Corporate tax of 25 % for companies up to Rs 250 crores
11. No change in personal income tax slabs
12. No TDS for senior citizens for interest up to Rs 50,000
13 . Standard Deduction of Rs 40,000 for salaried employees
14 . Deduction increased to Rs 50,000 for medical insurance of senior citizens
15. Long term capital gain Tax of 10 % for amount up to Rs 1 lakh .
16 . Cess on income Tax increased to 4 % from existing 3 % .
17 . Tax exemption limit is increased to Rs 50,000 for interest on bank / post office deposits for senior citizens
18. Increase in deduction limit for expenses on certain critical illness increased to Rs 1.00 Lakh for senior citizens . Existing limit is Rs 60,000 for senior citizens and Rs 80,000 for super senior citizens .
19. Investment limit to be increased to Rs 15 lakhs from existing Rs 7.5 lakhs in Pradhana Mantri Vayovandana Yojana .
1. Export of Agriculture products to be liberalised
2. Free housing for all by 2022
3. MSP of crops to be increased by 1.5 times of the production cost
4. New Health care system for poor with Rs 5 lakhs cover
5. 8 Crore BPL women to get free LPG connection
6. Tax burden for MSME to be reduced
7. Medical college for every three parliamentary constituencies
8 3.3% Fiscal deficit projected for Fy 18-19
9. Salary of president & governors to be increased
10 .Corporate tax of 25 % for companies up to Rs 250 crores
11. No change in personal income tax slabs
12. No TDS for senior citizens for interest up to Rs 50,000
13 . Standard Deduction of Rs 40,000 for salaried employees
14 . Deduction increased to Rs 50,000 for medical insurance of senior citizens
15. Long term capital gain Tax of 10 % for amount up to Rs 1 lakh .
16 . Cess on income Tax increased to 4 % from existing 3 % .
17 . Tax exemption limit is increased to Rs 50,000 for interest on bank / post office deposits for senior citizens
18. Increase in deduction limit for expenses on certain critical illness increased to Rs 1.00 Lakh for senior citizens . Existing limit is Rs 60,000 for senior citizens and Rs 80,000 for super senior citizens .
19. Investment limit to be increased to Rs 15 lakhs from existing Rs 7.5 lakhs in Pradhana Mantri Vayovandana Yojana .
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BUDGET PROPOSALS FOR FY 2017-18
Mr Arun Jaitley , Finance Minister presented his budget proposals for the financial year 2017-18 on 1st Feb , 2017 . If implemented , following aspects of your personal finance :
1.The Income tax rate for individuals in the income slab of Rs 2.5 lakhs to Rs 5 lakhs is reduced to 5 % from existing Rs 10 %
2. The existing rebate of Rs 5000 under section 87 A to the individuals earning between Rs 2.5 lakhs to Rs 5.00 lakhs is reduced Rs 2,500
3. Effectively there would be no tax burden up to income of Rs 3.00 lakhs
4. An additional surcharge of 10 % is levied for persons having annual taxable income between Rs 50 lakhs to Rs 100 lakhs .
5. Set off limit for loss under the head " Income from House Property " to any other income head is restricted to Rs 2.00 lakhs .
6. LIC will implement a scheme for senior citizens which assures pension at an assured return of 8 % per annum for a deposit for 10 year a maximum deposit of Rs 7.5 lakhs . This is in line with PM's announcement in December 2016
7 . No cash transaction will be allowed above Rs 3.00 lakhs with certain exceptions .
8. If any cash payments are made more than Rs 10,000 per day towards capital expenditure , such expenditure will be ignored while computing cost of such assets .
9 . Any cash payment made to an individual exceeds Rs 10,000 per day , such payments will not be allowed as deduction in computation of income from profits and gains of business / profession .
10 . Service charges on rail tickets booked through IRCTC is withdrawn .
1.The Income tax rate for individuals in the income slab of Rs 2.5 lakhs to Rs 5 lakhs is reduced to 5 % from existing Rs 10 %
2. The existing rebate of Rs 5000 under section 87 A to the individuals earning between Rs 2.5 lakhs to Rs 5.00 lakhs is reduced Rs 2,500
3. Effectively there would be no tax burden up to income of Rs 3.00 lakhs
4. An additional surcharge of 10 % is levied for persons having annual taxable income between Rs 50 lakhs to Rs 100 lakhs .
5. Set off limit for loss under the head " Income from House Property " to any other income head is restricted to Rs 2.00 lakhs .
6. LIC will implement a scheme for senior citizens which assures pension at an assured return of 8 % per annum for a deposit for 10 year a maximum deposit of Rs 7.5 lakhs . This is in line with PM's announcement in December 2016
7 . No cash transaction will be allowed above Rs 3.00 lakhs with certain exceptions .
8. If any cash payments are made more than Rs 10,000 per day towards capital expenditure , such expenditure will be ignored while computing cost of such assets .
9 . Any cash payment made to an individual exceeds Rs 10,000 per day , such payments will not be allowed as deduction in computation of income from profits and gains of business / profession .
10 . Service charges on rail tickets booked through IRCTC is withdrawn .
BUDGET PROPOSALS FOR FY 2016-17 AND YOUR PERSONAL FINANCE
Mr Arun Jaitley , Finance Minister presented his budget proposals for the financial year 2016-17 . If implemented , following aspects of your personal finance may be affected :
1.National Pension System ( NPS ) contributions become more wantable :Till date, the contributions to NPS were exempt from tax at Contribution, exempt on Income but was Taxed at Withdrawal. Now, 40% of your accumulation at the time of withdrawals will be tax exempt.
2. Tax boost for gold schemes : In the Gold Monetisation Scheme, this interest will now stand exempt from tax. The capital gains made on this scheme will also not attract capital gains tax. On the Sovereign Gold Bond Scheme, the interest earned will continue to be taxed. But on redemption, you will not have to pay capital gains tax any longer. If you transfer the bonds before maturity, you will be able to claim indexation benefits on long term capital gains.
3. For first time home buyers : If you are not already owning a house , Deduction for additional interest of Rs. 50,000 per annum has been allowed for loans up to Rs. 35 lakh, sanctioned during the next financial year provided the value of the house does not exceed Rs. 50 lakh.
4. Tenure increased u/s 24 : For claiming the deduction of interest under section (u/s) 24, for acquisition or construction of self-occupied house property, the time period has been increased from 3 years to 5 years.
5. Tax rebate increased for net income of upto Rs. 5 lakh : In order to lessen tax burden on individuals with income not exceeding Rs. 5 lakh, the ceiling of tax rebate has been increased under section 87A from Rs. 2,000 to Rs. 5,000.
6. Tax relief on rent : The limit of deduction in respect of rent paid under 80GG has been increased from Rs. 24,000 per annum to Rs. 60,000 per annum, which should provide relief to those who live in rented houses.
7. Dividend tax on stock Dividends exceeding Rs. 10 lakh : Stock Dividend incomes greater than Rs 10 lakh in a year for an individual will be taxed at 10%.
8 Additional surcharge on super rich : The surcharge on super-rich (income of over Rs. 1 crore) has been hiked from 12% to 15%.
9. No change in tax slabs/rates : There is no change in the Income Tax Slabs / Rates for Financial Year 2016-17.
10. Revised advance tax payment installments : The advance tax now has to be paid by individuals in 4 installments viz.
15th June15% of the total tax liability
15th September45% of the total tax liability
15th December75% of the total tax liability
15th March100% of the total tax liability
11. Interest part on Recognized Provident Fund (RPF) gets taxed at Withdrawal now : Till date, RPF was entirely tax-free (at the time of withdrawal too). Now, the interest accrued on 60% of the contributions after April 1, 2016 will be taxed while the principal amount will remain tax exempt. This 60% will also be tax exempt if it is invested in a pension annuity scheme.
12. Public Provident Fund (PPF) continues to remain under EEE tax regime. No part of PPF will be taxed and the present scheme of investment up to Rs 1.5 lakh in a year will continue to be tax exempt. PPF on withdrawal will continue to be out of the tax ambit.
1.National Pension System ( NPS ) contributions become more wantable :Till date, the contributions to NPS were exempt from tax at Contribution, exempt on Income but was Taxed at Withdrawal. Now, 40% of your accumulation at the time of withdrawals will be tax exempt.
2. Tax boost for gold schemes : In the Gold Monetisation Scheme, this interest will now stand exempt from tax. The capital gains made on this scheme will also not attract capital gains tax. On the Sovereign Gold Bond Scheme, the interest earned will continue to be taxed. But on redemption, you will not have to pay capital gains tax any longer. If you transfer the bonds before maturity, you will be able to claim indexation benefits on long term capital gains.
3. For first time home buyers : If you are not already owning a house , Deduction for additional interest of Rs. 50,000 per annum has been allowed for loans up to Rs. 35 lakh, sanctioned during the next financial year provided the value of the house does not exceed Rs. 50 lakh.
4. Tenure increased u/s 24 : For claiming the deduction of interest under section (u/s) 24, for acquisition or construction of self-occupied house property, the time period has been increased from 3 years to 5 years.
5. Tax rebate increased for net income of upto Rs. 5 lakh : In order to lessen tax burden on individuals with income not exceeding Rs. 5 lakh, the ceiling of tax rebate has been increased under section 87A from Rs. 2,000 to Rs. 5,000.
6. Tax relief on rent : The limit of deduction in respect of rent paid under 80GG has been increased from Rs. 24,000 per annum to Rs. 60,000 per annum, which should provide relief to those who live in rented houses.
7. Dividend tax on stock Dividends exceeding Rs. 10 lakh : Stock Dividend incomes greater than Rs 10 lakh in a year for an individual will be taxed at 10%.
8 Additional surcharge on super rich : The surcharge on super-rich (income of over Rs. 1 crore) has been hiked from 12% to 15%.
9. No change in tax slabs/rates : There is no change in the Income Tax Slabs / Rates for Financial Year 2016-17.
10. Revised advance tax payment installments : The advance tax now has to be paid by individuals in 4 installments viz.
15th June15% of the total tax liability
15th September45% of the total tax liability
15th December75% of the total tax liability
15th March100% of the total tax liability
11. Interest part on Recognized Provident Fund (RPF) gets taxed at Withdrawal now : Till date, RPF was entirely tax-free (at the time of withdrawal too). Now, the interest accrued on 60% of the contributions after April 1, 2016 will be taxed while the principal amount will remain tax exempt. This 60% will also be tax exempt if it is invested in a pension annuity scheme.
12. Public Provident Fund (PPF) continues to remain under EEE tax regime. No part of PPF will be taxed and the present scheme of investment up to Rs 1.5 lakh in a year will continue to be tax exempt. PPF on withdrawal will continue to be out of the tax ambit.
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