If you are a salaried individual then every year you must be eyeing on the budget presented by our FM. But this year in union budget 2018, there are hardly any changes for individual tax payers.
In such a scenario, one common question obviously comes in our mind that what are the changes this current Govt has made in last couple of budgets, starting from 2014?
In fact oppositions has started raising this debate, as we are going to have the general Loksabha election by 2019 and this seems to be the last budget of NDA Govt before the elections.
In this article, I will try to highlight the key changes done for the salaried class so far, from Budget 2014 to the latest 2018 budget.
Budget 2014 to Budget 2018: A Comparative Analysis
Mr. Arun Jaitley has taken some major changes in the initial budget 2014. Thereafter in every budget, FM has changed things slowly. Let us first explore them one by one.
- In his first budget itself, our FM has increased the basic income tax exemption limit from Rs 2 lakh to Rs. 2.5 lakh for individual taxpayers below the age of 60 years and for senior citizens, the limit was increased to Rs. 3 lakh. That means there are no changes in income tax slab rates till date.
- The 80C limit has also been increased up to Rs 1.5 lakh from the initial limit of Rs 1 lakh. This one was pending from long time and again no changes on further increase till budget 2018.
- Home loan interest exemption limit under section 24 has also been increased from Rs 1.5 lakh to Rs 2 lakh.
- The transport allowance of Rs 800 has been increased to Rs 1600 per month during budget 2015.
- Another significant move taken by Mr. FM is the removal of wealth tax in budget 2015. After that, he has increased the CESS up to 12% for income more than 1 crore.
- The health insurance premium has been increased from Rs 15,000 to 25,000.
- In budget 2015, FM increased the tax rebate from Rs 2,000 to Rs 5,000 (under Section 87A) for people with income less than Rs 5 lakh per annum. In Budget 2017, he has again reduced the tax rate from 10% to 5% in the Rs 2.5 lakh to Rs 5 lakh bracket. He has also reduced the tax rebate under Section 87A from Rs 5,000 to Rs 2,500 for senior citizens with income is up to Rs 3.5 lakh per annum.
So, these are few of the major changes we have seen in last few years. There are also some changes in the PPF and NPS rule. Now let’s check out the highlights of Budget 2018 and how it is different compared to old budgets so far.
Budget 2018 Highlights
- There are again no changes in income tax slab rates. That means if you compare with 2014 budget with Budget 2018 straightway, you can say that there are no changes in income tax slab rates directly.
- In a major move taken in this budget, Govt has removed the transport allowance and medical exemption and introduced the Rs 40,000 standard deduction limit again. This is nothing but an additional net benefit of minimum Rs 5,800.
- For Senior citizens there are couple of good news. The medical insurance cap is increased up to Rs 50,000 under section 80DD and the limit of interest income from savings account has also been hiked to Rs 50,000 from Rs 10,000.
- For stock market investors, there is a big blow as the LTCG tax is back again now. So far the Long term capital gain tax was not applied in case your holding is more than 1 year for equity investments. But now for a gain of more than 1 lakh in a year, a 10% LCTG tax will be applied. You have to pay taxes to the dividends you are going to earn from your equity investments as well.
- Govt has also removed the 3% education and higher education cess and increased that to 4% now.
So, overall if you see the overall picture, these are the changes that have been done in last couple of years. Although the expectations are till to get a higher deduction in individual income tax slab rates, but I think we have to wait further to see this change.
Author Bio: Santanu Debnath is a passionate blogger who writes about personal finance, investments, budgeting, home business ideas, insurance and money saving hacks through his MoneyGyaan.com
