Every Year when the union budget 2018 is announced, salaried individuals eagerly wait for some exemptions and deductions to come their way. The questions that generally pop-up in a salaried individual’s mind are: –
Silver lining in Budget 2018
- What will be the new tax slab?
- Will I have to pay more taxes? etc.
When the Union Budget 2018 was announced, there was a huge buzz about the standard deduction, but the million-dollar question that was bothering salaried individuals was, will their take-home salary increase or not?
Well, the answer to this question is yes, there will be the increase in the take-home salary of the employees. The fact is, corporates will have to alter their policies to match up with the latest budget and this will somewhere impact employees.
Let’s find out how this Budget is going to have a positive impact on the salaried individuals: –
Impact of Budget 2018 on employees
There is not much for the salaried individuals in Budget 2018 to rejoice about, the employee’s take-home salary has not really increased, that can be blamed on the additional 1% education cess. While the standard deduction adds Rs. 5,800 every year to an employee’s tax-exempt salary component, it translates to a yearly savings of at most Rs. 290 for the 5% salary bracket, which is further lowered by the increase in education cess.
The net benefit of an employee who falls under the 5% tax slab and earns Rs. 5lakh is Rs. 194 annually, whereas someone who falls under the 30% salary slab and earns Rs. 15lakh will have to pay Rs. 713 extra to the government.
The silver lining in the Budget
The only silver lining in the Budget 2018 is that the government has finally acknowledged the need to reduce paperwork in claiming deductions. Taxpayers will be spared the hassle of filling up several forms for claiming the deduction of medical and transport expenses and the documentation, storage and verification of paper bills.
Well, there is not much to be happy about the Union Budget 2018, for the salaried individual. Now, they can only vouch for the deduction available for them.