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Automated Income Tax Prepare Excel Based Software for F.Y.2018-19 with Important Changes in Tax Rules from FY 2018-19

budget makes some changes to tax laws every year and Budget 2018 was no
different. We must be aware of these changes and plan our taxes and
investments accordingly. Below are the 13 changes that Budget 2018 made and all of these would be applicable from April 1, 2018

#. Reintroduction of Standard Deduction

Budget 2018 has introduced a standard deduction of Rs 40,000 for
salaried taxpayers. The good thing is this would be applicable for
pensioners too. This deduction can be availed without submission of any

#. Transport Allowance & Medical Reimbursement no more Tax-free

the introduction of the standard deduction, the Transport Allowance
& Medical Reimbursement would no longer be tax-free. Currently, the
transport allowance was tax-free up to Rs 19,200 and medical
reimbursement up to Rs 15,000. Net of these allowances and introduction
of standard deduction salaried taxpayers have additional tax exemption
of only Rs 5,800.

Download: Automated House Rent Exemption Calculator

#. Cess on Taxes hiked to 4% (Health and Education Cess)

has been NO change in the income tax slabs in Budget 2018. However,
from FY 2018-19 the existing cess of 3% (Education, Secondary, and
Higher Education Cess) has been increased to 4% and named as Health and
Education Cess.

#. Reintroduction of Long-term capital gains tax on stocks and equity-based mutual funds

Budget 2018 has reintroduced long-term capital gains tax of
10%+cess (i.e. 10.4%) on gains made in the sale of equity or equity
oriented mutual funds. To qualify for long-term capital gains
the stocks/mutual fund should have been held for at least 1 year. The good news is capital gains up to Rs 1 lakh is tax-free.

#. Dividend distribution tax on Equity mutual funds

FY 2018-19 the dividends from equity mutual funds would attract
dividend distribution tax of 10%. However, the dividend received would
be tax-free in hands of the investor. This is mainly to equate dividend
and growth plans of equity mutual funds.

#. Increased tax exemption on interest income for senior citizens (80TTB)

Budget 2018 has introduced a new section 80TTB according
to which senior citizens would be able to claim interest income up to
Rs 50,000 as tax-exempted income. However, if you take benefit u/s 80TTB
then you cannot claim tax benefit on interest received on savings bank
account u/s 80TTA.

Download: Automated Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y.2000-01 to F.Y.2018-19

#. TDS limit on interest income increased for senior citizens u/s 194A

is TDS (tax deduction at source) for almost all kind of income.
However, as a relief to senior citizens, Budget 2018 has raised the
limit for TDS on interest income from Rs 10,000 to Rs 50,000. So TDS
would only be applicable for senior citizens if the annual interest
income from a bank/post office is more than Rs 50,000.

#. Tax deduction for Single Premium Health Insurance Premium

case assesses buy single premium health/medical insurance policy
covering multiple years, the tax exemption u/s 80D would be available
proportionately for all the years. For e.g., if you pay Rs 1,00,000
premium for a health policy covering for 5 years, you can claim Rs
20,000 tax exemption every year for 5 years subject to limits.

Download: Automated Advance Income Tax Calculator for F.Y.2018-19 with all feature of Budget 2018-19  

#. Increased deduction for medical insurance premium u/s 80D for senior citizens

Medical Insurance premium and the preventive health check-up limit for
senior citizens under section 80D has been increased from Rs 30,000 to
Rs 50,000. This is good news in keeping with the ever increasing health
care and related insurance costs.

#. Increased deduction for medical treatment u/s 80DDB for senior citizens

deduction for medical treatment of specified critical illnesses has
been increased to Rs 1 Lakh. Earlier the limit was Rs 60,000 for senior
citizens and Rs 80,000 for very senior citizens. Following illness are
covered under section 80DDB:
§                    Neurological Diseases
§                    Parkinson’s Disease
§                    Malignant Cancers
§                    AIDS
§                    Chronic Renal failure
§                    Hemophilia
§                    Thalassaemia

#. Extension of Partial Tax-exemption on NPS withdrawal to self-employed

above changes would be applicable for the FY 2018-19. So make a note of
the above and plan your investments and taxes accordingly

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