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Friday, February 2, 2018

General Budget 2018

The Hon'ble  Union Minister for Finance and Corporate Affairs, Shri Arun Jaitleyji presented the General Budget 2018-19 in the Parliament on 1/2/2018 the following are the highlights.

 In respect of 2.5 Crores salaried employees:

Proposed to allow a standard deduction of Rs. 40,000/- in lieu of the present exemption in respect of transport allowance ( Rs 19200/-) and reimbursement of miscellaneous medical expenses (Rs 15000/-)  so net benefit is Rs Rs 5800/- and tax on Rs Rs 5800/ @ 20% works out to Rs 1160/- 

The  Education cess  has been increased from 3% to 4% . 

Additional tax on Rs 10 lakhs income is Rs 1125/- 

Total benefit is only marginal Rs 35/- per year.  

Total disappointment for  2.5 Crores salaried employees who were aspiring for the revision of income tax exemption to Rs 4 lakhs. More over  the inflation is at 5% , the salaries are rising due to inflation , the salaried class is paying for inflation and government by way of additional tax  as  the income tax  rebate has  not  been provided in the current general budget 2018-19.  There is need to raise the income tax exemptions and income tax rates as the salaried employees are paying dual tax that is both income tax and GST , the total taxation is working out to about 35 % of  the total salary .  More over hardly about 10% of the country population are paying income tax , there is a need to increase the tax net , to lessen the burden on the existing tax payers.  

It is high time the Hon'ble  Union Finance  Minister  gives relief for the 2.5 Crores salaried employees who are paying the taxes.   

Relief to Senior Citizens/ Pensioners : 

Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000/- to Rs. 50,000/- and TDS shall not be required to be deducted on such income, under section 194A.

The  Hon'ble Finance Minister also announced raising the limit of deduction for health insurance premium and/ or medical expenditure from Rs. 30,000/- to Rs. 50,000/-, under section 80D.

The Hon'ble Finance Minister proposed raising the limit of deduction for medical expenditure in respect of certain critical illness from Rs. 60,000/- in case of senior citizens and from Rs. 80,000/- in case of very senior citizens, to Rs. 1 lakh in respect of all senior citizens, under section 80DDB.

In addition to tax concessions, the Hon'ble Finance Minister proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March 2020 under which an assured return of 8% is given by Life Insurance Corporation of India. The existing limit on investment of Rs. 7.5 lakh per senior citizen under this scheme is also being enhanced to Rs. 15 lakh. 

There is a marginal relief for the Senior Citizens / Pensioners, much more has to be done for these elderly people.  

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