NEW DELHI, March 31 : Various changes proposed in the Union Budget 2018-19 (presented by Finance Minister Arun Jaitley on February 1), including reduced import duties on select items and reintroduction of tax on long-term capital gains (LTCG), come into effect from April 1, 2018 (Sunday). Here are some of the important decisions taken in this year's budget: LTCG on equities The Union Budget 2018 proposed 10 per cent tax on long-term capital gains (LTCG) over Rs 1 lakh. Till now, any long-term gains made on equity shares or any equity mutual fund units were exempt from tax. The government, however, extended indexation benefit for computing tax liability on sale of shares listed after January 31. The 2018 Budget had after a gap of 14 years reintroduced 10 per cent tax on LTCG. Standard deduction There has been no change in the Income Tax slabs this year but for salaried employees, a standard deduction of Rs 40,000 is introduced by the government in lieu of transport and medical reimbursements. Budget 2018 has also increased the cess on incomes from 3 per cent to 4 per cent, which can increase your tax bill. Heyday for grey days (senior citizens) The exemption limit on income from interest raised by five times to Rs 50,000 per year. No TDS will be deducted from the interest income of senior citizens. The limit of deduction for health insurance premium and medical expenditure also increased to Rs 50,000 from Rs 30,000 under Section 80D. This additional deduction of Rs 20,000 will help a taxpayer save up to Rs 6,000 per annum. For senior and very senior citizens, the tax deduction for critical illness will be Rs 1 lakh from April 1, as against the existing limit of Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens. Corporate tax Corporate tax on businesses with up to Rs 250 crore turnover has been reduced to 25 per cent from 30 per cent. (Input from Agencies)
