Budget 2018 income tax slabs: Here is what FM Arun Jaitley announced for salaried employees

By: | Updated: February 1, 2018 4:24 PM

Budget 2018 income tax slab changes: Belying the hopes of everyone, Finance Minister Arun Jaitley choose not to make any changes in the present income tax structure. However, as expected, he announced a standard deduction of Rs 40,000 for salaried people in lieu of medical and transport allowances.

FM Arun Jaitley presents Union Budget 2018 today.Budget 2018 income tax slab changes: In the runup to the Budget 2018, there were expectations galore that Finance Minister Arun Jaitley will give some relief to the common man and taxpayers to ease their tax burden. (ANI)

Budget 2018 income tax slab changes: Hit hard by high inflation and the impact of demonetisation, the common man and taxpayers were expecting some relief in their tax burden. However, belying the hopes of everyone, Finance Minister Arun Jaitley choose not to make any changes in the present income tax structure, but, as expected, he announced a standard deduction of Rs 40,000 for salaried people in lieu of medical and transport allowances. In this case also, however, the benefit won’t be substantial as salaried people will get an additional benefit of Rs 5,800 only.

In the runup to the Budget 2018, there were expectations galore that Finance Minister Arun Jaitley will give some relief to the common man and taxpayers to ease their tax burden. Although no major tax concession was expected, it was being hoped that either the effective tax rate may be reduced or there might be some increase in the Section 80C deduction limit.

Know how Arun Jaitley’s Budget 2018 will impact your tax liability with this Income Tax Calculator

Here’s a look at the Income Tax Slabs for FY 2017-18:

Income Tax Slab for Individuals less than 60 years for F.Y. 2017-18
Income Slab(s)Income tax rate in F.Y. 2017-18
Upto Rs. 2,50,000Nil
From Rs 2,50,001- Rs 5,00,0005%
From Rs.5,00,001- Rs.10,00,00020%
Above Rs.10,00,00030%

 

Income Tax Slab for Individuals more than or equal to 60 years but less than 80 years known as Senior Citizens for F.Y. 2017-18
Income Slab(s)Income Tax Rate for F.Y. 2017-18
Upto Rs. 3,00,000Nil
From Rs 3,00,001- Rs 5,00,0005%
From Rs.5,00,001- Rs.10,00,00020%
Above Rs.10,00,00030%

 

Income Tax Slab for Individuals more than or equal to 80 years known as Super Senior Citizens For F.Y. 2017-18
Income Slab(s)Income Tax Rate for F.Y. 2017-18
Upto Rs. 5,00,000Nil
From Rs.5,00,001- Rs.10,00,00020%
Above Rs.10,00,00030%

According to experts, the personal tax slabs and rates have been continuously revised and tinkered with for the last several budgets. Hence, any significant further changes to the tax structure for individuals were not expected. “At best the exemption limit could be revised upwards to Rs 3 lakh per annum. There could also be an announcement of a road map to move towards a Direct Tax Code Structure. There could, however, be some changes to the corporate tax structure. Here the tax on both large and small corporates could be reduced. Taxation on large corporates could be bought down to around 25 per cent as promised earlier by Finance Minister Arun Jaitley,” said Ashish Kapur, CEO, Invest Shoppe India Ltd.

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Similarly, smaller companies could get more tax relief as that would encourage further investments and job creation. However, “this corporate tax relief, if it comes, is likely to be accompanied by withdrawal of various exemptions given to businesses,” added Kapur.

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CA Abhishek Soni, Founder tax2win.in, was also expecting that the limit of Section 80C will get hiked from Rs 1.5 lakh to Rs 2 lakh, which will allow individuals to save more.

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Some tax experts were also expecting a modification in the current income tax slab structure, keeping the fact in view that the cost of living has gone up substantially without there being a similar increase in income. Similarly, it was also being hoped that the standard deduction for salaried employees – which was done away with from Financial Year 2005-06 – may be re-introduced by Finance Minister Arun Jaitley in the Budget 2018.

CA Anurag Sodhani, consultant, Big4, said, “Salaried employees incur various expenses which remaining in job which they cannot claim as deduction. However, the few exemptions that are available to them under section 10 are subject to upper limits which have been fixed several years back and virtually serve no purpose on account of inflation. Keeping this in view, I hope that the erstwhile standard deduction will be introduced for salaried taxpayers, whereby straight deduction of, say, Rs 50,000 would be allowed form gross salary.”

 

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