14 big changes in Budget 2018

[Dhillon]

1. The government has proposed no changes to the income tax rates for individuals.
2. The existing 3% education cess is proposed to be replaced by a 4% “Health and Education Cess” to take care of the needs of education and health of BPL and rural families.
3. The present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses is proposed to be replaced with a standard deduction of Rs. 40,000 for all salaried employees. Additional deduction of Rs. 5,800 per year.
4. Benefits to Senior Citizens:
   • Interest income of senior citizens (60+years of age) on deposits with banks and post offices up to Rs. 50,000/- will be exempt u/s 80TTB and no TDS shall be deducted on such income, under section 194A.
   • Health insurance premium or medical expenditure for all senior citizens will now be eligible for benefit of deduction of up to Rs. 50,000/- per annum u/s 80D.
   • Deduction u/s. 80DDB for expenses incurred on treatment of certain critical illnesses raised to Rs 1 lakh in respect of all senior citizens from existing Rs. 60,000 / 80,000.
   • Now senior citizens will be able to invest in Pradhan Mantri Vaya Vandana Yojana by Life Insurance Corporation of India, up to March 2020 providing assured return of 8%. They will now be able to invest up to Rs. 15 lakh in this scheme as against earlier Rs. 7.5 lakh.
5. E-assessment proposed to be rolled out across the country, transforming the age-old assessment procedure of the income tax department. A new scheme for assessment will be notified where the assessment will be done in electronic mode eliminating person to person contact leading to greater efficiency and transparency.
6. Long-term capital gains on transfer of listed equity shares or equity MFs, exceeding Rs. 1 lakh is proposed to be taxed at the rate of 10% without allowing the benefit of indexation. However, this amendment will be effective from 1st April 2018 and will not apply to the gains earned till 31st January 2018.
7. No adjustment shall be made to the sale consideration for calculation of capital gain from sale of an immovable property, where the circle rate value does not exceed by 5% of the actual consideration received for such sale. This will provide a bit relief in case of hardship in real estate transaction.
8. There is no change in the holding period of listed equity shares needed to qualify them as long-term assets. The gains from equity shares held up to one year will remain short-term capital gain and will continue to be taxed at the rate of 15%.
9. Dividend distribution tax of 10% is proposed to be introduced on income distributed by the equity oriented mutual funds.
10. Section 54EC exemption is proposed to be restricted only for sale of land or building or both and will not be available for any other asset. The holding (lock-in) period of these bonds is proposed to be increased from existing 3 years to 5 years from 1st April 2018 (i.e. A.Y. 2019-20).
11. Reduced corporate tax rate of 25% for companies whose turnover was less than Rs. 50 crore in financial year 2015-16 extended to companies who have reported turnover of up to Rs.250 crore in the financial year 2016-17.
12. Cash payments made by trusts and institutions in excess of Rs. 10,000 shall be disallowed and the same shall be subject to tax.
13. Customs Duty on certain products, such as mobile phones and televisions proposed to be increased, to provide a fillip to 'Make in India'.Customs duty on imitation jewellery hiked from 15% to 20%; doubled on all watches to 20%.
14. Import duty on LCD/LED/OLED panels, parts of TVs proposed to be hiked to 15%; duty on smart watches, wearable devices, footwear doubled to 20%.