Budget 2018 -19 – Income Tax
2018 has turned out to be a year of innovations, of new ideas, of new experiments which sometimes have resulted in grave scarcity but also have reported good growth. Here is a new tax slab of 2017 18, mentioned below for the economic lovers. Economics has remained one of the most experimented fields. Being an aware citizen, one needs to know about the schemes in the budget 2018, which our honorable finance minister has announced recently in his speech. Agriculture is one of the major subjects which have attracted the attention of the government the most; and apart from the agriculture, the other important subjects which causes the attention of the government to be centralized includes healthcare problems. Some of the highlights of Budget 2018-2019 are as follows.
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- There are noticeable changes in the limit of tax exemption. But, the tax has shown spikes of 3% to 4% for the taxpayers.
- The new policy has changed the former system of giving allowances to the transportation of pensioners and salaried taxpayers, which the former government had followed.
- The new policy assures a relief of ₹ 1, 00,000; it is promised to be deduced for the people suffering from critical illness.
- A deduction amount of ₹ 50,000 will be granted for senior citizens for their medical insurance.
- There is another policy for benefitting senior citizens, invented by the government to cause relief to them by reducing their tax burdens; here are some of the clauses of the policies which the government has announced:
- There could be a sharp increase in the limit of deduction for those insurances that are issued for health; and whose premiums are ranged from ₹ 30 thousand to ₹ 50 thousand
- There would no more deduction of TDS from the income under section 194A.
- There is an increase in the deduction of the limit of expenditures for the medical, for the pre-defined some kind of critical illness. A sum of Rs. 60000 will be granted as the deduction on the medical expenditure for the senior citizens in this scheme.
- The tax which formerly was termed as to be a part of the tax to be levied on Education will now be studied under the Health and Education tax. Moreover, there is also an increase of 3-4 percent in the effective rates of the same.
Newly introduced Standard Deduction for Salaried Individuals:
Salaried individuals will be facing a new change in the scheme through which they once received allowances; the one which they formerly made them eligible for receiving allowances. According to the new schema, the 2018 budget will provide a deduction of ₹ 40,000 on the income instead. They are now debarred from the present exemption of money for transportation. They will be given ₹ 19,200 per year; and in addition to this, they will also receive a total sum of 15000 per year for their medical expenses.
The company or employers are allowed to make a flat deduction from the income of their employee, working under them for salary; the standard deduction specifies that the amount deduced should be in accordance to his employment and post; and, there would be no need of proof for the same.
This is such a good proposal and scheme that both, the salaried employees and the pensioners, will be benefitted from the same.
Abrupt spike in cess rates
As mentioned before, the payable cess or tax has seen to be spiked from 3% to 4%. Though, it has not shown any changes in the income tax rates.
Resident individual below the age of 60 years:
According to Indian rules of income tax department the percentage of income to be deposited as income tax is divided into different groups on the basis of a range of income. It starts from zero income tax rate and cess for income filed up to Rs 2,50,000 after that for the income range between Rs 2,50,001 to RS 5,00,000 it is 5 percentage of total income filed minus Rs 2,50,000 with addition of 4 percent of cess, for income range of Rs 5,00,000 to Rs 10,00,000 one have to pay an amount of Rs 12,500 pulse 20 % of total income minus Rs 5,00,000 with addition of 4 percent cess and for above 10,00,001 a text of 1,12,500 + 30% of total income minus Rs 10,00,000 with addition of 4 percent of cess.
An illustration for the Income tax slab and the increased Cess:
The total tax gathered in our country in the past two years starts from a Rs 4,50,000 in the year 2017 – 2018 structure and Rs 4,50,000 in year 2018 – 2019 of taxable income, an amount of Rs 40,000 in year 2018 – 2019 and zero in year 2017 – 2018 for standard deduction, Rs 19,200 in year 2017 – 2018 and zero in year 2018 – 2019 of transport allowance, after these an amount of Rs 15,000 in year 2017 – 2018 and zero in year 2018 – 2019 in medical reimbursement, Rs 4,15,800 in year 2017 – 2018 and Rs 4,10,000 in year 2018 – 2019 in net tax income, tax of Rs 8,290 in2017 – 2018 year and Rs 8,000 in year 2018 – 2019, cess of 248.7 for year 2017 – 2018 and Rs 320 in year 2018 – 2019 and total tax to be paid for year 2017 – 2018 is Rs 8,538.7 and Rs 8,310 in the year 2018 – 2019 and after all that savings is 218.7 in the year 2018 – 2019.
The above example is a clear illustrations for the employee income details and also is best understood for the tax calculation.
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A resident individual who is of an age of 60 years or above but less than 80 years
According to Indian rules of income tax department the percentage of income to be deposited as income tax is divided into different groups on the basis of a range of income. It starts from zero income tax rate and cess for income filed up to Rs 3,00,000 after that for the income range between Rs 3,00,001 to RS 5,00,000 it is 5 percentage of total income filed minus Rs 3,00,000 with addition of 4 percent of cess, for income range of Rs 5,00,001 to Rs 10,00,000 one have to pay an amount of Rs 12,500 pulse 20 % of total income minus Rs 5,00,000 with addition of 4 percent cess and for above 10,00,001 a text of 1,10,500 + 30% of total income minus Rs 10,00,000 with addition of 4 percent of cess.
An illustration for the Income tax slab and the increased Cess:
The total tax gathered in our country in the past two years starting from a Rs 6,00,000 for current year structure and Rs 6,00,000 for proposed year of taxable income, an amount of Rs 40,000 for proposed year and zero in year for current year standard deduction, Rs 19,200 for current year and zero for proposed year of transport allowance, after these an amount of Rs 15,000 for current and zero for proposed year in medical reimbursement, Rs 5,65,800 for current and Rs 5,60,000 for proposed year in net tax income, tax of Rs 23,160 current year and Rs 22,000 in episodes year, cess of Rs 694.8 for current year and Rs 880 for proposed year and total tax to be paid for current year is Rs 23854.8 and Rs 22,880 for proposed year and after all that savings is Rs 974.8 for proposed year.
A resident individual who is of age 80 years or above
According to Indian rules of income tax department, the percentage of income to be deposited as income tax is divided into different groups on the basis of a range of income. It starts from zero income tax rate and cess for income filed up to Rs 5,00,000 after that for the income range between Rs 5,00,001 to RS 10,00,000 it is 20 percentage of total income filed minus Rs 5,00,000 with addition of 4 percent of cess and for above 10,00,001 a text of 1,10,500 + 30% of total income minus Rs 10,00,000 with addition of 4 percent of cess.
An illustration for the Income tax slab and the increased Cess:
The total tax gathered in our country in the past two years are starts from an Rs 8,00,000 for current slab structure and Rs 8,00,000 for proposed structure of taxable income, an amount of Rs 40,000 for proposed slab structure and zero in year for current slab structure standard deduction, Rs 19,200 for current slab structure and zero for proposed structure of transport allowance, after these an amount of Rs 15,000 for current slab structure and zero for proposed structure in medical reimbursement, Rs 7,65,800 for current slab structure and Rs 7,60,000 for proposed structure in net tax income, tax of Rs 53,160 current slab structure and Rs 52,000 in episodes structure, cess of Rs 1,594.8 for current year and Rs 2,080 for proposed structure and total tax to be paid for current year is Rs 23854.8 and Rs 22,880 for proposed structure and after all that savings is Rs 674.8 for proposed structure.
The above example shows the basic structure of an individual’s income from the new tax slab 2017 18 recently launched, and his financial status.
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