Income tax

What are all the major changes in Income Tax for the Year 2018-19 ?

1. From the Financial year 2018-19, Tax Payers will have to pay 4% as Health and Education Cess on the Income Tax Payable. Education cess prior to 2018-19 was 3%

2. Salaried Employees are entitled to Standard Deduction of up to Rs. 40,000 from the taxable income from the year 2018-19. (Section 17(2) of Income Tax Act)

3. Income Tax Exemption on reimbursement of Medical Expenses has been withdrawn. Until FY 2017-18 Income Tax exemption was allowed for the medical expenses up to Rs. 15,000/- reimbursed by the employer.

4. Income Tax Exemption on Transport Allowance paid to Employees has also been withdrawn. Earlier Section 10 (14) (ii) provided for Income tax exemption in respect of Transport Allowance up to Rs. 1600 per month. However, physically challenged employees who are entitled to double transport allowance would continue get Income Tax Exemption on Transport Allowance up Rs. 3200 per month.

5. Senior Citizens will be getting additional concessions from the FY 2018-19 in the form of increased Income Tax Exemption on Health Insurance Premium paid up to Rs. 50,000 and Interest on bank deposits to the extent of Rs. 50,000

1. Income Tax 2018-19 on Salary Income and Pension

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INCOME TAX SLAB	TAX RATE	CESS RATE
Income up to Rs 2,50,000*	Nil	4% on Income Tax
Income from Rs 2,50,000 – Rs 5,00,000	5%	4% on Income Tax
Income from Rs 5,00,000 – 10,00,000	20%	4% on Income Tax
Income more than Rs 10,00,000	30%	4% on Income Tax

2. Income Tax Slab for Senior Citizens (60 Years Old Or More but Less than 80 Years Old)

INCOME TAX SLAB	TAX RATE	CESS RATE
Income Tax Slab	Tax Rate	4% Income Tax
Income up to Rs 3,00,000*	No tax	4% Income Tax
Income from Rs 3,00,000 – Rs 5,00,000	5%	4% Income Tax
Income from Rs 5,00,000 – 10,00,000	20%	4% Income Tax
Income more than Rs 10,00,000	30%	4% Income Tax

3. Income Tax Slab for Senior Citizens(80 Years and above)

INCOME TAX SLAB	TAX RATE	CESS RATE
Income Tax Slab	Tax Rate	4% on Income tax
Income up to Rs 5,00,000*	No tax	4% on Income tax
Income from Rs 5,00,000 – 10,00,000	20%	4% on Income tax
Income more than Rs 10,00,000	30%	4% on Income tax

Surcharge: 10% and 15% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore and exceeds Rs. 1 Crore respectively.

4. Income Tax Relief under Section 87A:

Income Tax Relief of up to Rs. 2500/- under Section 87 A has been retained in respect of Tax Payers whose Taxable Income does not exceed Rs. 3.5 lakh.