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Important Income Tax Amendments Budget 2018

Some Important Income Tax Amendments Budget 2018

1Tax on Long Term Capital Gain Under Income Tax Act, 1961Equity shares & Mutual Funds LTCG >1Lac taxable @ 10%. Indexation benefit for investment in above after 31.01.2018 is available
2Standard deduction on salary incomeRs. 40k for Salaried Employees
3ExemptionOf Transport allowance & medical reimbursement not available any more.
4Senior Citizen – Section 80TTBFor those over 60 Years, Exemption of Rs.50k on Interest Income from deposits of Banks, Co-op banks & Post Office & no TDS on same.
5Senior Citizen – Section 80DSec. 80D Deductions for senior citizens raised to Rs. 50000
6Senior Citizen – Section 80DDBSection 80DDB Enhanced deduction to senior citizens for medical treatment to Rs. 1 Lakh
7NPSFor Self employed assessees exempted withdrawal @ 40% of accumulated corpus on maturity or account closure
8Section 54ECLock In period increased to 5 years from 3 Years
9Cess rateIncreased to 4% in the name of 'Health & Education Cess'
10Health Insurance – Section 80DIn case of Single premium policy having cover of > 1 year deduction will be on proportionate basis for the years for which cover is provided, subject to limits.
11GratuityReceived on or after 1st April, Basic Exemption Limit increased to Rs. 20 Lac.
12Capital GainNo CG Tax if variation in Stamp duty & actual consideration is upto 5% i.e if Sale consideration is < Stamp authorities rate.
13Conversion of Stock in trade to Capital Asset will be liable to Tax, Consideration – FMV on the date of conversion.
14Exemption to Non residents from transactions entered via recognized stock exchange located in IFSC, if consideration paid or payable in Foreign currency.
15ICDSInventory not being listed will be valued at cost & rest securities shall be valued at cost or NRV, whichever lower.
1625% Tax rateDomestic companies whose turnover does not exceed 250Cr.
1743(B)Applicable to charitable trusts too.
18TDSNon deduction of TDS on expenses will attract disallowance in hands of Charitable trusts too.
1980JJAABenefit extended to footwear & leather industry, No. of minimum days reduced to 150 & benefit of this section @30% will be to those new employees who is employed for minimum period during the 1st year but continues to subsequesnt year, such deduction will be available in subsequent year.
202(22)(e) DividendTaxable in the hands of company @30%
21276CCCompanies are excluded from said Section i.e even if no tax liability and return filed late no exemption under this section will be allowed.
22AMTFor unit located in IFSC deriving sole income from Foreign Exchange AMT will be 9%.
2344AEIn the case of heavy goods vehicle (more than 12MT gross vehicle weight), the income would deemed to be Rs. 1,000/ton of gross vehicle weight or unladen weight/month for each goods vehicle.
24115BBENo deduction can be made even in case where additions are made by the Assessing Officer as unexplained income. (Applicable retrospectively from Assessment Year 2017-18.)
25271JAppeal can be filed by with ITAT against the penalty order of Assessing Officer. (Applicable from AY 2018-19)
26193Person responsible for paying to a resident any interest on 7.75% Savings (Taxable) Bonds, 2018 shall deduct tax @ 10% therefrom, if the interest payable on such bonds exceeds Rs. 10,000.
272(22)(d)Widens the scope of the term 'accumulated profits'.In the case of an amalgamated company, accumulated profits, whether capitalised or not, or losses as the case may be, shall be increased by the accumulated profits of the amalgamating company, whether capitalized or not, on the date of amalgamation.

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