A taxpayer should be well versed with the latest tax rules for the Financial Year 2018-19, as it will affect them in the long run.
Tax Rules for the New Financial Year
Here is the list of Tax Rules that all the taxpayers should remember for the coming financial year: –
Health and Education Cess
According to the Budget 2018-19, there is no change in the tax rates or tax slabs for the individual taxpayers and HUFs, it will remain same in the A.Y. 2019-20 the way it was in A.Y. 2018-19. There is a new cess called Health and Education Cess that has been introduced in the latest budget and it will be paid at the rate of 4 %.
Reintroduction of Standard Deduction
As per the Latest Union Budget, the standard deduction will be available for the salaried individuals. A Salaried individual can claim a standard deduction of up to Rs. 40,000, but the travel allowances and medical reimbursements will not be available from F.Y. 2018-19. All in all, the total benefit of this change will be Rs. 5,800.
Deduction with respect to the interest earned by the Senior Citizens
According to Budget 2018, a deduction of Rs. 10,000 is available to all the individuals with respect to the interest income from deposit accounts held with any kind of co-operative society, bank and post office. In the latest budget, it is proposed that a deduction of up to Rs. 50,000 will be available to Senior Citizens with respect to the interest income from deposits held with co-operative societies, banks and post. However, no separate benefits under section 80TTA will be available.
Medical Treatment of Senior Citizens for Specified diseases
Under the existing provisions, the deduction that is available is increased to Rs. 1,00,000 for the medical treatment of senior and super senior citizens. Before the recent budget, the limit for this was Rs. 60,000 for Senior Citizens and Rs. 80,000 for super senior citizens. There is deduction available to individuals and HUFs for the expenses on the Medical Treatment.
Deductions under section 80D
According to the Union Budget 2018, a senior citizen can claim up to Rs. 50,000 for the expenditure on his/her medical treatment where there is no insurance under section 80D. The maximum deduction of Rs. 30,000 can be claimed by an individual or HUF for their expenditure on Medical insurance premium.
Extension of Tax-Free Withdrawal from NPS
As per the new tax rules 2018-19, a tax benefit of NPS, that is 40% of the total amount payable can be enjoyed by all NPS subscribers.
Taxability of Long Term Capital Gains on Equity Shares
The Budget 2018 has brought 10% tax on Long-Term Capital Gains arising out of a sale of an equity oriented mutual fund as well as equity shares if the capital gains exceed Rs.1lakh a year.