Its income tax season and the only thing you must worry about is paying your taxes in time. FM Arun Jaitley has introduced a number of tax changes which will come into effect from April 1st 2018. Don’t you want to know about them?
So why are these income tax changes important? These income tax changes will be applicable from the Fiscal Year 2018-19 and soon they will be applicable to you.
Do take a look at some of the 5 important income tax changes. Want to know more on tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
The introduction of a standard deduction will help more than 2.5 Crore salaried employees, enjoy a tax deduction. The additional standard deduction of Rs 40,000 a year, will replace the existing transport allowance of Rs 19,200 a year and the Rs 15,000 medical reimbursement.
What does this mean? You and other salaried taxpayers will enjoy a flat deduction of Rs 40,000 a year. Don’t you think this is great for you?
2. Check the reintroduction of the LTCG
The Government has introduced the long-term capital gains tax popularly called LTCG, on equity (shares + mutual funds) investments. If the LTCG on the sale of equity and equity-linked funds exceeds Rs 1 Lakh a year, a 10% tax will be applied, effective April 1st 2018.
Remember: The capital gains till January 31st 2018 will be grandfathered.
SEE ALSO: Income Tax Notices You Might Get
3. There’s a tax on dividend distributed by equity mutual funds
The income generated from the dividend distributed by equity funds will be charged at 10%. This cannot be great news for you.
4. There’s a higher cess
The Government has increased the cess from 3% to 4% on income tax for individual taxpayers. This puts an additional tax burden on you.
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New Pension Scheme popularly called NPS, is an excellent retirement planning investment for the citizens of India. NPS allows you to invest in equity, up to a maximum of 50% of the investment. The remaining is in Corporate and Government Bonds.
Your investment in NPS enjoys tax benefits under Section 80C and some other Sections.
The Finance Minister Arun Jaitley has extended the benefits of tax-free withdrawal from the NPS, to even non-employee subscribers. This new exemption for the non-employee subscribers, for tax-free withdrawals from the NPS, will be valid from the Financial Year 2018-2019. This exemption is currently not enjoyed by non-employee subscribers.
See Also: Income tax return status
Tax season comes just once a year. Why not pay attention to these 5 important tax changes? They could save you a lot of money and propel you on the path to riches. Be Wise, Get Rich.
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