The Key Features In Tax Rules To Come Into Effect From April 1,2018 with Automatic All in One Income Tax Calculator for F.Y.2018-19 & A.Y. 2019-20

April 1, the beginning of the new fiscal 2018-19, brings in some major changes in the tax structure which were announced by Finance Minister Arun Jaitley while presenting the Union Budget 2018. The tax reforms will impact individual taxpayers in a number of ways, such as the standard deduction of Rs 40,000 instead of the transport allowance and medical expenses.

Standard Deduction

Though the tax slabs were not changed this year, the finance minister reintroduced the standard deduction method. A standard deduction of Rs 40,000 will be effective in lieu of transport allowance and medical reimbursement.

Around 2.5 crore salaried employees and pensioners will gain from the new rule.

The Central Board of Direct Taxes had previously said that the standard deduction can be claimed directly and would not require any proofs or bills to avail it.

Medical, travel allowances will be taxed(Abolished)

With the induction of standard deduction, medical and travel allowances will be taxed from next fiscal. Medical allowances up to Rs 15,000 and travel allowance till Rs 1,600 per month used to be tax-free and could be claimed by furnishing bills.

Cess now 4%

Finance Minister Arun Jaitley has hiked the educational cess on income tax and corporation tax to 4 percent. At present, individual taxpayers shell out a 3 percent cess – 2 percent cess for primary education and 1 percent cess for secondary and higher education.

For senior citizens
Tax exemptions were announced on deposits with banks and post offices for senior citizens only. Interest income will now be increased five times from Rs 10,000 to Rs 50,000.
TDS (tax deducted at source) under section 194A will not be applicable to any fixed deposit scheme or recurring deposit schemes for the senior citizens.

Breather for the senior citizen on medical expenses

The deduction limit for health insurance premium or medical expenditure was increased from Rs 30,000 to Rs 50,000 under section 80D.

The deduction limit for medical expenses for critical illness was also hiked from Rs 60,000 (for senior citizens) and Rs 80,000 (for very senior citizens) to Rs 1 lakh, under section 80DDB.

Pradhan Mantri Vaya Vandana Yojana

Pradhan Mantri Vaya Vandana Yojana was extended up to March 2020, under which senior citizens can invest up to Rs 15 lakh. The current limit is Rs 7.5 lakh per senior citizen.

National Pension System is tax-free

The withdrawal of pension money was made tax free for non-employee subscribers. There is no such provision at present.

Click here to Download Automated TDS on Salary for Govt & Non- Govt employees for F.Y.2018-19 and A.Y.2019-20 with Automated Arrears Relief Calculator with Form 10E from F.Y.2018-19 and A.Y. 2019-20 as per new Finance Budget 2018 [ This Excel Based Software can prepare at a time Tax Computed Sheet + Individual Salary Structure as per Govt & Non-Govt Salary Pattern + Automated H.R.A. Calculation U/s 10(13A) + Automated Form 16 Part B + Automated Form 16 Part A&B + Automated Arrears Relief Calculation from F.Y.2000-01 to F.Y.2018-19 with Form 10E]

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All in One TDS on Salary for Govt & Non-Govt Employees for F.Y.2018-19 & A.Y. 201920 with Budget 2018: Impact on the Salaried Class

Budget Impact on the Salaried Class

Budget 2018 is rolled out and how! Mixed feelings for most people, except for the salaried class. The budget has not made any changes to the tax slabs of salaried individuals, leading them to sing the blues, in a chorus. Given the pattern from the last few years, there were similar expectations this year too. Even though that did not happen, the Finance Minister has proposed to reintroduce the “standard deduction” from the gross salary of individuals.

The amount of standard deduction proposed to be Rs 40,000, will replace the existing transport allowance of Rs 1600 per month and medical allowance of Rs 15,000 per annum which are usually deducted from the gross salary and claimed as an exemption. So, no changes in tax slabs is not a total loss, since the standard deduction of Rs 40,000 will replace medical allowance of Rs 15,000 and transport allowance of Rs 1600 per month i.e. Rs. 19,200 per annum, so the effective additional benefit would be an additional income exemption of Rs 5,800.

Furthermore, FM Jaitley proposed to hike the cess by 1%, in the name of Health Cess, making it effectively 4% ‘Health and Education Cess’. As of now, an education cess of 3% was levied on personal income tax, after the budget announcement it soared high to a 4%. While this move may help the government in meeting the healthcare and education needs of the rural families, it is certain that the tax liability of both individuals and corporate will increase.

Let’s have a look at the tax proposals made in the Budget 2018 for the Salaried Class

The Income Tax Slabs for the Assessment Year 2019-20 would continue to be as follows

For Individuals (resident or non-resident) upto 59 years
Upto 2,50,000	NIL
2,50,001 – 5,00,000	5%
5,00,001 – 10,00,000	20%
10,00,001 & Above	30%

For resident individuals who are 60 years and above but below 80 years
Up to 3,00,000	NIL
3,00,001 – 5,00,000	5%
5,00,001-10,00,000	20%
10,00,001 & Above	30%

For resident individuals who are 80 years and above
Up to 5,00,000	NIL
5,00,001 – 10,00,000	20%
10,00,001 & Above	30%

Surcharge too has not undergone any change from that of AY 2018-19

Income from Rs 50,00,001 – 1,00,00,000	10% of tax
1,00,00,001 & Above	15% of tax

In a nutshell:

• A resident individual is entitled to rebate u/s 87A if his total income does not exceed Rs. 3,50,000. The amount of rebate shall be 100% of income-tax or Rs. 2,500, whichever is less

• ‘Health and Education Cess’ charged at 4% replaces ‘Education Cess’ and ‘Higher & Secondary Education Cess’ earlier charged at 3%

• A Standard deduction of Rs 40,000 from the taxable Salary replaces the transport allowance and the miscellaneous medical Reimbursement. This will result in an additional income exemption of up to Rs 5,800/-

Click here to Download Automated TDS on Salary for Govt & Non- Govt employees for F.Y.2018-19 and A.Y.2019-20 with Automated Arrears Relief Calculator with Form 10E from F.Y.2018-19 and A.Y. 2019-20 as per new Finance Budget 2018 [ This Excel Based Software can prepare at a time Tax Computed Sheet + Individual Salary Structure as per Govt & Non-Govt Salary Pattern + Automated H.R.A. Calculation U/s 10(13A) + Automated Form 16 Part B + Automated Form 16 Part A&B + Automated Arrears Relief Calculation from F.Y.2000-01 to F.Y.2018-19 with Form 10E]

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