Budget 2018 : Income Tax Calculation after 40000 standard deduction
Finance Minister Arun Jaitley did not change any slabs or rates of personal income tax in budget 2018 . Though, he announced a standard deduction of Rs. 40000 in place of exemptions allowed for medical reimbursement i.e. Rs. 15000 & transport allowance i.e. Rs. 19200. He also announced cess increased on income tax from 3 per cent to 4 per cent for taxpayers. We have provided few examples on how these tax changes will impact your income tax going forward in 2018-19 (Assessment Year 2019-20), if you are a salaried employee. Example – 1 (In Rs. ) Total savings: Rs. 244 For FY 2017-18 Taxable Income - 400000 Standard Deduction - NA Medical Reimbursement & Transport Allowance - 34200 Net Taxable Income - 365800 Income Tax - 5964 (with 3% cess) For FY 2018-19 Taxable Income - 400000 Standard Deduction - 40000 Medical Reimbursement & Transport Allowance - NA Net Taxable Income - 360000 Income Tax - 5720 (with 4% cess)