10 Income Tax Rules That Will Change from April 1, 2018 in India

  • 1) Rs 40,000 standard deduction introduced: This additional deduction has been proposed in place of existing deductions of Rs. 19,200 for transport allowance an
  • 2) Higher cess: Cess on income tax was raised to 4 per cent from 3 per cent for individual taxpayers on the amount of income tax payable.
  • 3) Long-term capital gains tax on equity investments: A new 10 per cent tax (cess extra) will be applicable on capital gains exceeding Rs 1,00,000
  • 4) Tax on dividend income from equity mutual funds: A tax at the rate of 10 per cent will be levied on dividend distributed by equity-oriented mutual funds.
  • 5) More income tax benefits on single premium health insurance policies:
  • For single premium health insurance policies having cover of more than 1 yr. deduction will be allowed on a proportionate basis.
  • 6) Income tax benefit on NPS withdrawal: The government has proposed an extension to the benefit of tax-free withdrawal from NPS to non employee subscriber
  • 7) Deduction in respect of interest income to senior citizens:
  • A new Section 80TTB is proposed to be inserted to allow a deduction up to Rs 50,000 in respect of interest income from deposits held by senior citizens.
  • However, no deduction under Section 80TTA shall be allowed for senior citizens where 10,000 was allowed before.
  • The government also proposed to increase the investment limit in Pradhan Mantri Vaya Vandana Yojana or PMVVY to Rs. 15 lakh from Rs. 7.5 lakh.
  • 8) The threshold for deduction of tax at source on interest income for senior citizens is proposed to be hiked from Rs 10,000 to Rs 50,000.
  • 9)The deduction for senior citizens on payment of health insurance premiums has increased from 30k to 50k.
  • The deduction available payment towards medical treatment of specified disease is proposed to be hiked to Rs 1 lakh for very senior citizen (earlier Rs 80,000)

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