New Delhi, Feb 1: In a major disappointment to individual taxpayers, Finance Minister Arun Jaitley didn’t announce any change in the existing tax slabs in Budget 2018-2019. It was expected that the government will increase the limit of income tax exemption from Rs 2, 50,000 to Rs 3,00,000. However, the Finance Minister said that no change was proposed for the same. Also Read - India Fast Moving From Tax Terrorism to Tax Transparency, Says PM Modi
Finance Minister Arun Jaitley, however, provided relief to salaries taxpayers by way of standard deduction of Rs 40,000 under transport and medical reimbursement. (Highlights of Budget 2018) Also Read - I-T Dept Exposes Rs 500 Crore Fake Bill Entry Operation Racket, Raids 42 Locations Across India
The government announced tax benefits to senior citizens. He announced that interest earned on bank deposits up to Rs 50,000 will be tax free. (Also read: Salaries of President, Vice-President, Governors Get a Big Hike; Benefit For MPs Too) Also Read - AR Rahman Gets Legal Notice From Madras Court in Income Tax Case
For the financial year 2017-18, there were three slabs for income tax— 5 per cent income tax for individuals with annual income between Rs 2.5 lakh and Rs 5 lakh, 20 per cent on annual income from Rs 5 lakh to Rs 10 lakh, and 30 per cent on income above Rs 10 lakh. (Also read: Budget 2018: Good News For Women Employees; EPF Deduction to be Reduced to 8 Percent)
In Budget 2017-18, Arun Jaitley had proposed a reduction of 5 per cent in income tax rate for individuals with income ranging between Rs 2.5 lakh to Rs 5 lakh. He had also announced surcharge of 10 per cent for those whose annual income is Rs 50 lakh to Rs 1 crore.
Meanwhile, Jaitley announced that only 8 per cent EPF will be charged from women.
“Facility of fixed term employment to be extended. 12% government contribution to EPF for new employees. Women’s contribution to EPF to be reduced to 8% for first three years,” Jaitley said.
“Contribution of 8.33% to EPF for new employees by the govt for three years and 12% govt contribution to EPF in sectors employing large number of people,” he added.