One must know the changes made in income tax rules this year to acknowledge what needs to be informed. Some of the changes in Income tax rules are:
1: Transport Aid:
You can’t use the yearly deduction up to Rs 19,200 anymore on transport aid which was allowed till last year without any evidence. However, an annual deduction of up to Rs 38,400 is allowed for an employee, who is blind or deaf.
2: Medical payment:
Tax deductions up to Rs 15,000 on account of medical payment, which was allowed without any evidence of actual expense, are no longer allowed to be subtracted from salary.
3: Standard Deduction:
A standard deduction of Rs 40,000 or the amount of salary has been re-established this year for salaried persons. As standard deduction replaces transport aid and medical payment, the net gain will be Rs 5,800 only.
4: Health and Education levy:
The health and education levy, which is charged on the amount of tax payable, has been boosted from 3 percent to 4 percent this year.
5: Contribution of Govt in EPF:
The private-sector employees those have salary up to Rs 15,000 per month, the government will add 12 percent of eligible salary to employee’s provident fund (EPF) for the first three years.
6: LTCG Tax on Equity:
10 percent tax has been introduced on long-term capital gain (LTCG) of over Rs 1 lakhs taking together atonements of all the equities.
7: Dividend Distribution Tax:
10 percent dividend distribution tax has been introduced in the equity segment, which is deducted before distribution of the dividend on equities.