Union Budget 2018 Highlights: Key takeaways from Union Budget 2018

In this article, we will discuss the key takeaways from the union budget 2018.

Latest Updates

1. Exemption from ITR filing to senior citizens aged 75 years and above, earning only pension and interest income.
2. The income tax department launched pre-filled ITRs with additional details to simplify the return filing process.
3. The due date for filing belated and revised returns is reduced by 3 months. This also means that the IT department will have to process the returns and send a notice under section 143(1) by 31st December.

Download Union Budget 2018 Highlights by Finance Minister, Mr.Arun Jaitley.

For Salaried Professionals

• Personal income tax slab rates remain the same.
• Introduction of Standard deduction of Rs 40,000 for the salaried class (replacing the transport allowance and the miscellaneous medical Reimbursement)
• Education cess now to be called Health and Education cess and effective rate increased to 4% from 3%
• Introduction of tax on long-term capital gains above Rs 1 lakh on the sale of equity shares @ 10% without giving the benefit of indexation. Capital gains tax for until 31 January 2018 will be grandfathered
• Short-term capital gains to continue to be taxed @ 15%

For Senior Citizens

• No TDS on interest from FD upto Rs 50,000.
• Section 80TTB introduced to exempt interest from FDs , Post Office upto RS 50,000.
• Exemption under Section 80D up to Rs 50,000 for medical insurance for senior citizens.
• Exemption limit for Medical Expenditure for certain critical illness from raised from Rs 60,000/- in case of senior citizens and from Rs 80,000 in case of super senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB.

Other Highlights

• Reduction in the corporate tax rate to 25% for companies having a turnover of Rs 250 crores and less during FY 2016-17.
• Deduction under Section 54EC is restricted to the transfer of land/Buildings/ both and the Holding period of the long-term investment asset such as NHAI/ REC Bonds is now increased to five years from the earlier period of three years.
• Equity Oriented Mutual funds to face a Dividend Distribution Tax @ 10%
• Alternate Minimum Tax (AMT) to be levied on non-corporate taxpayers operating in International Finacial Service Centre(IFSC) on par with MAT for corporates i.e 18.5% instead of 9%.
• Introduction of e-assessments to reduce interface between income tax department & taxpayers.
• Deduction under Section 80-IAC for the eligible business of Start-Ups, is now also available to those that are incorporated on or after the 1st day of April 2016 and ending on  the 31st day of March, 2021 with a condition that the turnover should not exceed Rs 25 Crore for seven previous years commencing from the date of incorporation. The eligible business now also includes “Improvement of products or processes or services or a scalable business model with a high potential for employment generation or wealth creation”.

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