Union Budget 2018 proposals come into effect today
Union Budget 2018 proposals come into effect today
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A number of important changes will walk into the financial life of several Indians as today is April 1 the first day of the next financial year, 2018-19. All the proposals which were declared in the budget for the coming financial year will come into force from April 1.

From Sunday, Indian Accounting Standard (Ind AS) 115 would be effective for the new financial year. The new accounting standard is set to change the way companies in several sectors will measure, recognize and disclose revenues in their financial statements. This revenue recognition standard provides for numerous additional disclosures, which will notably enhance transparency of financial statements, said accountancy experts. In wake of this, the other two standards – Ind AS 18 and 11 – which are related to revenue and construction contracts, would close down to be present.

For senior citizens

The exemption limit on income from interest lifts up by five times to Rs 50,000 per year. No TDS will be deducted from the interest income of senior citizens now on. Also, the limit of deduction for health insurance premium and medical expenditure also increase to Rs 50,000 from Rs 30,000 under Section This additional deduction of Rs 20,000 will assist a taxpayer save up to Rs 6,000 per annum. The tax deduction for critical illness will be Rs 1 lakh from April 1 for senior and very senior citizens, as against the existing limit of Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens.

E-way bill

The businesses which transport goods of over Rs 50,000 in worth from one state to other will have to now bring an e-way bill from April 1. This measure is likely to clamp down on the trade that presently occurs on the cash basis. The e-way bill provision of the Goods and Services Tax (GST) was introduced on February 1, 2018.

Compensation for termination or modification of employment

At present, certain compensation in relation with employment is out of the purview of taxation that leads to base erosion and loss of revenue. But from April 1 things will amend. “It is proposed that any compensation or other payments due to or received by any person in connection with the termination or the modification of the terms and conditions of any contract relating to his employment shall be taxable under the head income from other sources,” as per a report.

LTCG on equities        

The Union Budget proposed 10 per cent tax on long-term capital gains (LTCG) over Rs 1 lakh. Till now, any long-term gains made on equity shares or any equity mutual fund units were let off from tax. The government, however, extended indexation advantage for computing tax liability on the sale of shares listed after January 31.

 

Standard Deduction 

There has been no change in the Income Tax slabs this year but for salaried employees, a standard deduction of Rs 40,000 is introduced by the government in course of transport and medical reimbursements. Budget 2018 has also increased the cess on incomes from 3 per cent to 4 per cent, which can increase your tax bill.

Corporate Tax

Corporate tax on businesses with up to Rs 250 crore turnovers has been condensed to 25 per cent from 30 per cent.

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