With the start of new financial year 2018-2019, though the income tax slab remains the same as previous financial year, we have some new income tax rules coming into effect. let’s take a peek into some key changes:
- Introduction of 10% LTCG tax on Long term capital gains exceeding INR 1,00,000 on equity investments (equity mutual funds and stocks). But that should not dictate your investment selection against equity as investments in equity still beats other investment options in terms of efficiency. (Consult your financial advisor for details).
- for Senior Citizens, Tax Exemption of interest income (from deposits in banks and post offices) raised to INR 50,000 from INR 10,000. for others it remains INR 10,000.
- Introduction of Standard deduction of INR 40,000 for salaried tax-payers.
- Deductions on conveyance (transport allowance)(1600 per month) and medical expense reimbursements (15000 per annum) no longer exists. The absence of these deductions is compensated by the introduction of standard deduction of 40,000 mentioned above.
- Section 80 (D) deduction limit (paid as Health Insurance Premium) increased from INR 30,000 to INR 50,000 for senior citizens. The same can be claimed by tax payers paying health insurance premiums for their senior citizen parents.