Download Automated Income Tax Arrears Relief Calculator From F.Y.2000-01 to F.Y. 2018-19 With a Complete Guide to Tax Exemption for Financial Year 2018-19

Budget 2018 has created a significant impact on personal finance, in respect of investments, savings, and taxes. It is important to think beyond Section 80C to maximize your income tax benefits. Also, you must align your investments with your tax-saving instruments to get absolute benefits.

Here we have a complete list of tax deductions you can claim under the Income Tax Act, this financial year 2018-19.

Section 80C – Investments

There are approximately 14 instruments through which you can claim a deduction under Section 80C. Financial instruments like Employee Provident Fund, National Savings Certificate, Public Provident Fund, National Pension System, payment made towards children’s tuition, Life Insurance premium, ELSS, deposit in Sukanya Samriddhi Yojana, etc offer tax benefit under this section.

A deduction of Rs.1,50,000 from your total income in FY 2017-18 can be claimed by an individual or a HUF, u/s 80C.

Section 80CCD – Government Pension Scheme

Under this section, you can claim a deduction for the contribution made towards National Pension Scheme.

Section 80CCD (1) – Employee’s Contribution –

If you are an employee: Maximum deduction allowed is 10% of your salary.

If you are self-employed: Maximum deduction allowed is 20% of your gross total income.

Section 80CCD (1B) – Self contribution –

An additional deduction of up to Rs.50,000 for investment in a Tier I NPS account. The contribution made towards Atal Pension Yojana is eligible as well.

Section 80CCD (2) – Employer’s Contribution –

An additional deduction of up to 10% of the salary of the employee, towards contribution made to employee’s pension fund. No financial limit exists on this deduction.

Download Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from F.Y. 2000-01 to F.Y.2018-19 [ Updated Version ]

 Section 80D – Health Insurance

Tax benefit u/s 80D of Rs.50,000 shall be available for senior citizens.

If you pay a premium for a Health Insurance, on behalf of your parents, an additional deduction of up to Rs.20,000 (Rs.50,000 (less) Rs.30,000) shall be available. If you fall under the tax bracket of 30%, you shall be eligible for an additional tax benefit of up to Rs.6,000 (30% of Rs.20,000).

In the case of super senior citizens (aged above 80 years) who are uninsured, a medical expense of up to Rs.30,000 shall be allowed as a deduction.

Section 80DDB – Critical Illness

Under section 80DDB tax deduction of Rs.40,000 is available, for medical treatment of specified ailments, for individuals below 60 years of age. These specified ailments include AIDS, Cancer, Thalassaemia, etc.

Rule 11DD has the list of these specified ailments. A certificate from a registered doctor, in Form 10I, will have to be furnished.

Tax exemption on treatment expense of specified critical illness was Rs.60,000 for senior citizens and Rs.80,000 for very senior citizens. This limit has been proposed to be increased to Rs.1,00,000 for all senior citizens.

If an expenditure has been incurred by you for treatment of your senior citizen parents, for a specified ailment, ad additional tax deduction of Rs.40,000 can be claimed.

Section 80TTA – Savings Account

Interest earned on Savings Account in post office, bank, or cooperative society, shall be exempt up to Rs.10,000.

Interest earned from this account will have to be included in Other Income. Deduction claimed will have to be on the total interest earned or Rs.10,000, whichever is less. This benefit is available for an individual and a HUF.

This tax benefit is not allowed on interest earned via Recurring Deposits, Fixed Deposits, or Corporate Bonds.

Section 80GG – HRA

If you are residing in a rented house, HRA is an excellent tax saving option for you. The tax benefit you will be able to avail would depend on your Basic Salary, the HRA that has been provided by your employer, the rent you pay, and your place of residing.

Section 80G – Charity & Relief Funds

Tax exemption of up to 50% of the amount paid via cash, draft, or cheque (up to Rs.10,000), towards a charitable organization or relief fund can be claimed. Contribution towards specified organizations makes you eligible for 100% tax exemption.

W.e.f FY 2017-18, a donation in cash, in excess of Rs.2,000, shall not be allowed as a deduction. A donation made above Rs.2,000 will have to be made in any mode other than cash, to avail tax benefit.

Section 80E – Education Loan

Interest paid on loan for higher education post completion of your Senior Secondary Examination shall be eligible for a tax deduction claim under this section. This benefit shall be allowed on loan taken for higher education of yourself, your spouse, your children, or a student for whom you are a local guardian.

Tax deduction under this section can be availed for up to 8 years or till the payment of interest, whichever is earlier. No limit has been set on the amount of interest.

Standard Deduction of Rs.40,000

A standard deduction of Rs.40,000 has been introduced for employees. You will have to forego the transport allowance with deduction Rs.19,200, and medical reimbursement with deduction Rs.15,000.

This standard deduction will provide a benefit of Rs.5,800 (Rs.40,000 (less) Rs.34,200)

Section 24(b) – Home Loan

You can claim a tax benefit on the interest component of your home loan u/s 24(b). In case of properties that are self-occupied, deduction of up to Rs.2,00,000 shall be applicable.

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Download 100 employees Automated Income Tax Form 16 Part A&B for F.Y.2018-19

The New introduce deduction Rs. 40,000/- as a Standard Deduction by the Finance Budget 2018-19. The Income Tax Slab for the Financial Year 2018-19 & Ass Year 2019-20 are as follows:-

Click here to Download the Automated 100 employees, Master of Form 16 Part A&B for the Financial Year 2018-19 and Ass Year, 2019-20[ This Excel Utility can prepare at a time 100 employees Form 16 Part A&B. Who are not able to Download Form 16 Part A from the Traces Portal, they can use this Excel Utility.]

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Download Automated Income Tax 50 employees Form 16 Part B for F.Y.2018-19 with Budget 2018 Highlights – Major changes you must know

Budget 2018 Highlights – Major changes you must know

$ No Change in Income Tax Slab Rates for FY 2018-19  or AY 2019-20

There is no change in IT Slab Rates for individuals. Hence, the applicable tax slab will be as below.

$ EPF Contribution by Government for new employees and women

The government will contribute 8.33% of Employee Provident Fund (EPF) for new employees by the Government for three years.

Women employees contribution to EPF now reduced to 8% from the earlier 12%. This reduced contribution will be for the first 3 years of employment.

Both these moves will bring in more take home for both new employees and women.

Along with this, Government will contribute 12% to EPF for new employees for three years by the Government in sectors employing the large number of people like textile, leather, and footwear.

Also, paid maternity leave is now increased from 12 weeks to 26 weeks, along with the provision of crèches.

$ Rs.40,000 Standard Deduction for Salaried individuals and pensioners

Rs.40,000 standard deduction is available for all salaried individuals in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses.

This is I think a big relief many as it will rejoice the salaried individuals.

$ TDS limit raised for Senior Citizens

Exemption of interest income on deposits with banks and post offices to be increased from Rs.10,000/- to Rs.50,000/- and TDS will not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.

But do remember one thing that AVOIDING TDS DOES NOT MEAN AVOIDING TAX.

$ Sec.80D limit raised to Rs.50,000 for Senior Citizens

limit of deduction for health insurance premium and or medical expenditure from Rs.30,000/- to Rs.50,000/-, under section 80D. All senior citizens will now be able to claim the benefit of the deduction up to Rs.50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred.

This I think a much-awaited relief to many senior citizens. Because the premium of health insurance will increase as you grow older. Hence, by increasing Sec.80D limit, Government really helped this class.

Download Automated Master of Form 16 Part B for 50 employees for F.Y.2018-19 & A.Y.2019-20 [ This Excel Utility can prepare at a time 50 employees Form 16 Part B as per the New Budget 2018-19 including the New Standard Deduction Rs. 40,000/-]

$Limit of deduction on medical expenditure critical illness for senior citizens raised

The limit of deduction for medical expenditure in respect of certain critical illness from, Rs.60,000/- in case of senior citizens and from Rs.80,000/- in case of very senior citizens, to Rs.1 lakh in respect of all senior citizens, under section 80DDB.

$ Pradhan Mantri Vaya Vandana Yojana extended to March 2020

Pradhan Mantri Vaya Vandana Yojana is the 10 years 8% guaranteed pension scheme meant for senior citizens. The earlier deadline for the closure of this scheme was 3rd May 2018. Now, this is extended to until March 2020.

Also, the good news is that the earlier limit under this scheme was Rs.7,50,000, which is now increased to Rs.15,00,000.

$ Long-Term Capital Gain Tax (LTCG) levied on Stocks and Equity Mutual Funds

The biggest jolt to equity investors is the introduction of LTCG regime. Govt now introduced  LTCG on the income exceeding Rs.1 lakh at the rate of 10% without allowing the benefit of any indexation. However, all gains up to 31st January 2018 will be grandfathered.

Do remember that the time horizon to measure the STCG and LTCG will remain same. There is no change in STT rates. Hence, STCG on equity and equity mutual funds will continue at 15% rate.

Let us assume that your purchased price of the stock is at Rs.100 (purchased before 31st January 2018) and the highest price traded price on 31st January 2018 is at Rs.120. This Rs.20 will be tax-free for you. There is no tax on this Rs.20 gain as Rs.120 is considered as the holding price.

Now let us assume that you sold the stock after a year at Rs.150, then only Rs.30 is taxed at 10% but not the whole Rs.50. Hence, any gain up to 31st January 2018 is still tax-free for all investors.

Refer my latest post in this regard in detail-Budget 2018 LTCG Tax on Stocks and Mutual funds

9) Dividend Distribution Tax (DDT) on Equity Mutual Funds

Up to now dividend you receive from equity mutual fund was tax-free. However, now be ready to pay the 10% DDT on such income.

10) Education and Health Cess increased to 4%

Currently, there is 3% cess on personal income tax consisting of 2% for primary education and 1% for secondary and higher education.

Now this 3% existing educational and higher education cess is replaced to 4% HEALTH AND EDUCATION CESS.

Other important proposals of Budget 2018 Highlights are as below.

a) National Health Protection Scheme

The government will launch the National Health Protection Scheme. In this scheme, each family will be covered for Rs.5 lakh of health insurance per year. This will be for secondary and tertiary care hospitalization.

This will be the world’s largest government-funded health care programme. This is mainly to the poor and vulnerable families.

Along with this, Government will provide nutritional support to all TB patients at the rate of Rs.500 per month for
the duration of their treatment.

b) E-Assessment is made mandatory

Now no more physical IT return filing allowed. From now onward you have to file IT Returns only through online mode. This will actually reduce the time taken to process your IT returns.

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