Income Tax is a topic very often found to be a part of conversations of all salaried personnel’s. Prior to the budget being presented, a lot of the above-said conversations were centered on, what would presenting Budget 2018 mean to income tax rates for the Financial Year 2018. Though every year, prior to the Budget being presented the expectations run high, not a lot of change comes along with every new budget where a lot of them have actually been non-events.
The Budget 2018 was presented by the Finance Minister Arun Jaitley in Parliament on 1st February 2018. In the Budget 2018, there is no proposal for changing the structure of income tax slabs. The Budget 2018 has raised the tax liability of citizens, except for some categories of senior citizens. Though INR 40,000 standard deduction has been announced for salaried individuals, the actual benefit is very less since it is in lieu of existing benefits. Besides, health and education cess have increased on tax from 3% to 4% which increases the tax liability of the salaried personnel.
For the calculation of tax to be given to the Government for the Financial year 2018, Assessment of the year 2017 is done. The tax liability differs from male to female to senior citizen to super senior citizen. Income tax can be placed under 5 various heads; Income from salaries, Income from house properties, Income from profession or profits or gains, Income from capital gains and Income from other sources.
The next step in the process of calculating tax liability is to consider the deductions that are given under Section 80 C of the Income Tax Act and which include payment of life insurance premium, investment in the public provident fund, equity-linked savings schemes, and so on.
Other details and their deductions, like interest earned from bank deposits, donation made, health insurance premium paid and interest paid on education loan, house rent allowance is provided for under different heads of income. The House Rent Allowance exemption can be separately claimed.