A large number of taxpayers will see and feel an impact on their financial lives as April 1 is the beginning of the next financial year, 2018-19.
All the Budget proposals announced on February 1 will come into effect from April 1.
Listed below are the key impact points which will financially impact the lives of Individuals and Businesses:
Impact for all taxpayers
Due to hike in and education cess, all taxpayers will pay a bit of more tax. Budget 2018 had proposed to hike cess on income tax from 3% to 4% thereby increasing the tax payable by all categories of taxpayers.
For the highest tax bracket, for example on an income of 15 lakh the tax goes up by Rs 2625. For the middle income assuming an income of Rs 5 lakh to 10 lakh, the tax goes up by 1,125 and for the lowest bracket, assuming income of Rs 2.5 lakh to 5 lakh, the tax goes up by Rs 125
All Investors will have to pay tax on long-term capital gains (LTCG) exceeding Rs 1 lakh from sale of shares. However, indexation benefit for computing tax liability on sale of shares listed after January 31 will be available.
The salaried and the pensioners
The Budget proposed a standard deduction of Rs 40,000 in lieu of transport allowance and medical reimbursement.
This will kick in from April 1. Presently, no tax is applicable on Rs 19,200 of transport allowance and medical expenditure of up to Rs 15,000. This has now been subsumed into the new standard deduction of Rs 40,000.
If you have lots of money earning interest, you need not bother about tax as much as you used to. The exemption limit on income from interest for senior citizens will now be five times higher to Rs 50,000 per year. Those planning to upgrade or buy insurance will benefit from higher limit of deduction for health insurance premium and medical expenditure which has been raised to Rs 50,000 from Rs 30,000 under section 80D of the I-T Act.
If the turnover of your company is up to Rs 250 crore, you have a big reason to cheer. You will pay less corporate tax, at 25 percent. As 99 percent of the tax-filing companies fall in this bracket, this is really a big change
All taxpayers will have to shell out more as tax, what is to see is how this impacts the elections in 2019 and how the government uses the funds to further improve on the India story.
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