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TMI BlogINCOME TAX FOR INDIVIDUALS – ASSESSMENT YEAR 2019–20X X X X Extracts X X X X X X X X Extracts X X X X ..... INCOME TAX FOR INDIVIDUALS – ASSESSMENT YEAR 2019–20 - By: - Mr. M. GOVINDARAJAN - Budget - Dated:- 7-2-2018 - - Introduction The individuals, especially the salaried people expected much from the Finance Minister in his budget for this year 2018. But the Finance Minister did not bring the income exemption limit and also the rate structure. However he introduced some changes that will be beneficial to some extent. In this budget, the senior citizens and very senior citizens will gain more than the salaried people. Individuals Tax rate In the case of every individual other than senior citizen and very senior citizen or HUF or association of persons or body of individuals, whether incorporated or not, or every artif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial judicial person the rates of income tax are as below- Where the total income does not exceed ₹ 2,50,000 = NIL Where the total income exceeds ₹ 2,50,000 but does not exceed ₹ 5,00,000 = 5% of the amount by which the total income exceeds ₹ 2,50,000 Where the total income exceeds ₹ 5 lakh but does not exceed ₹ 10 lakhs= ₹ 12,500/- plus 20% of the amount by which the total income exceeds ₹ 5 lakhs Where the total income exceeds ₹ 10 lakhs= ₹ 1,12,500/- plus 30% of the amount by which the total income exceeds ₹ 10 lakhs. Standard deduction Section 16(i) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act, 1961 deals with the standard deduction allowed to the individuals which has been omitted by Finance Act, 2005 with effect from 01.04.2006. Now the standard deduction has again been introduced in the present budget. Clause 7 of the Finance Bill, 2018 proposes to insert a new sub-section (ia) allowing a deduction of ₹ 40,000/- or the amount of salary, whichever is less. But at the same time the Finance Ministry took away the exemption granted to Transport allowance and also the medical reimbursement exemption up to ₹ 15,000/- per year. In total the benefit accrues the salaried people is very meager. Senior citizen Tax rate In the case of every individual, being a resident in India, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the age of 60 years or more but less than 80 years at any time during the previous year, the rates of income tax are as below- Where the total income does not exceed ₹ 3,00,000 = NIL Where the total income exceeds ₹ 3,00,000 but does not exceed ₹ 5,00,000 = 5% of the amount by which the total income exceeds ₹ 3 lakhs Where the total income exceeds ₹ 5 lakh but does not exceed ₹ 10 lakhs= ₹ 10,000/- plus 20% of the amount by which the total income exceeds ₹ 5 lakhs Where the total income exceeds ₹ 10 lakhs= ₹ 1,10,000/- plus 30% of the amount by which the total income exceeds & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 10 lakhs. Deduction in health insurance premium and medical treatment Section 80D provides for a deduction of up to ₹ 30,000/- shall be allowed to an assessee in respect of payments towards annual premium on health insurance policy or preventive health check up of a senior citizen. It is proposed to amend Section 80D so as to raise the monetary limit of deduction from ₹ 30,000/- to ₹ 50,000/- Deduction for medical treatment of specified diseases Section 80DDB provides for a deduction to an individual to amount paid to medical treatment for specified diseases in respect of senior citizens up to ₹ 60,000/- subject to specified conditions. It is proposed to amend the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80DDB so as to raise the monetary limit of deduction to ₹ 1,00,000/- for senior citizens. Deduction in respect of interest income Section 80TTA provides for a deduction of ₹ 10,000/- in respect of interest income from saving account. It is proposed to insert a new section 80TTB so as to allow a deduction up to ₹ 50,000/- in respect of interest income from deposits held by senior citizens. No deduction under section 80TTA shall be allowed in these cases. In line with this amendment it is also proposed to amend section 194A so as to raise the threshold for deduction of tax at source on interest income for senior citizens from ₹ 10,000/- to ₹ 50,000/-. Standard deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior citizens are eligible for standard deduction of ₹ 40,000/- under section 16(i) of the Income Tax Act, 1961 . Very Senior citizen Tax rate In the case of every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year, the rates of income tax are as below- Where the total income does not exceed ₹ 5,00,000 = NIL Where the total income exceeds ₹ 5 lakhs but does not exceed ₹ 10 lakhs= 20% of the amount by which the total income exceeds ₹ 5 lakhs Where the total income exceeds ₹ 10 lakhs= ₹ 1,00,000/- plus 30% of the amount by which the total income exceeds ₹ 10 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs. Deduction in health insurance premium and medical treatment Section 80D provides for a deduction of up to ₹ 30,000/- shall be allowed to an assessee in respect of payments towards annual premium on health insurance policy or preventive health check up of a senior citizen. It is proposed to amend Section 80D so as to raise the monetary limit of deduction from ₹ 30,000/- to ₹ 50,000/- Deduction for medical treatment of specified diseases Section 80DDB provides for a deduction to an individual to amount paid to medical treatment for specified diseases in respect of senior citizens up to ₹ 60,000/- subject to specified conditions. It is proposed to amend the provisions of section 80D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DB so as to raise the monetary limit of deduction to ₹ 1,00,000/- for senior citizens. Deduction in respect of interest income Section 80TTA provides for a deduction of ₹ 10,000/- in respect of interest income from saving account. It is proposed to insert a new section 80TTB so as to allow a deduction up to ₹ 50,000/- in respect of interest income from deposits held by senior citizens. No deduction under section 80TTA shall be allowed in these cases. In line with this amendment it is also proposed to amend section 194A so as to raise the threshold for deduction of tax at source on interest income for senior citizens from ₹ 10,000/- to ₹ 50,000/-. Standard deduction Senior citiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ens are eligible for standard deduction of ₹ 40,000/- under section 16(i) of the Income Tax Act, 1961 . Surcharge on income tax The surcharge on income tax is increased in the present finance bill. The following is the surcharge rate- Total income exceeding ₹ 50 lakhs but not exceeding ₹ 1 crore surcharge 10% on income tax; and Total income exceeding ₹ 1 crore surcharge 15% of such income tax. Provided that in case of total income exceeding ₹ 50 lakhs but not exceeding ₹ 1 crore, the amount payable as income tax and surcharge on such income shall not exceed the total amount payable as income tax on a total income of ₹ 50 lakh by more than the amount of income that excee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds ₹ 50 lakhs. In case of total income exceeds ₹ 1crore, the total amount payable as income tax and surcharge on such income shall not exceed the total amount payable as income tax and surcharge on a total income of ₹ 1 crore by more than the amount of income that exceeds ₹ 1 crore. Health and Education Cess 3% Education Cess to be replaced with Health and Education cess @ 4% for all taxpayers will be levied on the income tax. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... 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