Income Tax Highlights in Union Budget 2018
Long Term Capital Gains on listed securities i.e. Gain on shares or Mutual Funds held for more than one year was earlier exempt from Income Tax. Now for gain above Rs.1 Lakhs ,tax @ 10% without any indexation benefit has been levied. However any gain upto 31/01/2018 would not be leviable to tax.
No change in the structure of tax rates for individuals.
Rs.50,000 deduction for mediclaim insurance u/s 80D for senior citizens.Earlier it was Rs.30,000.
Interest exempt upto Rs.50,000 for senior citizens on FD and Post Office also. Earlier it was only Rs.10,000 for all on saving account only.
Rs.40,000 standard deduction to salaried class. It means that deduction of Rs.40,000 will be given to all salary persons from salary income before calculating tax on salary income. However benefit of transport allowance of Rs.19200 and medical reimbursement of Rs.15000 has been withdrawn.
E assessment would be rolled out in all the country. Means now one would not have to visit department for assessment proceedings in case is selected for scrutiny. Notice would come online and reply would also be filed online. There would be no face to face contact with Income Tax officer and taxpayer.
3% education cess replaced with 4% health and education cess.
Companies having turnover upto 250 crores would now have to pay Income Tax @ 25% only. Earlier only companies having turnover upto 50 crores were paying tax @ 25% and other @ 30%.
To control cash economy restrictions put on trusts for making payments above Rs.10,000 in cash and for deduction of TDS. Earlier there was no restriction on trusts for making cash payments and TDS provisions were also not applicable.
Delhi HC had struck down applicability of Income Computation and Disclosure Standards (ICDS). These have now been given statutory backing. It would increase compliance burden on businesses to a great extent.
All companies irrespective of income to file returns and in case not filed, such companies would be liable for prosecution irrespective of tax liability.
Obtaining PAN made compulsory for all entities entering into financial transactions for more than Rs.2,50,000. PAN made compulsory of all Directors/Partners/Members of such entities also.
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