Some personal finance essential highlights from the last budget of the Modi government before the general elections next year include-
- Arun Jaitley has left the income tax slabs unchanged in this budget saying that the government had already made some positive changes in the tax rate on the personal income in the last three years.
- The budget of 2018 has proposed to increase the income tax from 3% to 4% increasing the tax to be paid by all the categories of taxpayers. The tax liability too has increased by Rs. 2,625 for the highest tax bracket. For the middle-income taxpayers, the tax liability has increased by Rs. 1,125 and for the lowest tax brackets, by Rs. 125.
- A standard deduction of Rs. 40,000 from the salary income to employees has been proposed as per the budget 2018. This is the flat amount which will be subtracted from the salary income before the taxable income is computed.
- The budget 2018 has proposed to offer a standard deduction of Rs. 40,000 from the salary income to employees, there has also been a proposal to take away the annual transport allowance of Rs 19,200 and Rs. 15,000 medical reimbursement.
- The contribution of new women workers has been capped at 8% instead of 12% or 10%.
- The long-term capital gains have exceeded Rs. 1 Lakh and have to be taxed at 10%. All gains up till January 31, 2018, will, therefore, be excused.
- For senior citizens under section 80 D, the limit of deduction has been proposed from Rs. 30,000 to Rs. 50,000.
- For senior citizens, the interest income on the bank and post office deposits will be hiked from Rs. 10,000 to Rs. 50,000. This is for all the FDs and RDs.
- It has been proposed that a dividend distribution tax should be introduced on the equity-oriented mutual funds at 10%.
- The budget has proposed to increase the limit of PMVVY to Rs. 15 Lakh.