Extracts from Finance Minister,s budget speech on 01.02.2018
Extracts from Finance Minister,s budget speech on 01.02.2018
Relief to salaried taxpayers
The Government had made
many positive changes in the personal income-tax rate applicable to individuals
in the last three years. Therefore, I do not propose to make any further change in the structure of the income tax rates for individuals. There is a general perception in the society that individual business persons have better income as compared to salaried class. However, income tax data analysis suggests that major portion of personal income-tax collection comes from the salaried class. For assessment year 2016-17, 1.89 crore salaried individuals have filed their returns and have paid total tax of `1.44 lakh crores which works out to average tax payment of `76,306/- per individual salaried taxpayer. As against this, 1.88 crores individual business taxpayers including professionals, who filed their returns for the same assessment year paid total tax of `48,000 crores which works out to an average tax payment of `25,753/- per individual business taxpayer.
143.
In order to provide relief to salaried
taxpayers, I propose to allow a standard deduction of `40,000/-
in lieu of the present exemption in respect of transport allowance and
reimbursement of miscellaneous medical expenses. However, the transport
allowance at enhanced rate shall continue to be available to differently- abled
persons. Also other medical reimbursement benefits in case of hospitalization
etc., for all employees shall continue. Apart from reducing paper work and
compliance, this will help middle class employees even more in terms of
reduction in their tax liability. This decision to allow standard deduction
shall significantly benefit the pensioners also, who normally do not enjoy any
allowance on account of transport and medical expenses. The revenue cost of
this decision is approximately `8,000
crores. The total number of salaried employees and pensioners who will benefit
from this decision is around 2.5 crores.
Relief to senior citizen
144.
A life with dignity is a right of
every individual in general, more so for the senior citizens. To care of those
who cared for us is one of the highest honours. To further the objective of
providing a dignified life, I propose to announce the following incentives for
senior citizens:
·
Exemption of interest income on
deposits with banks and post offices to be increased from `10,000/-
to `50,000/-
and TDS shall not be required to be deducted on such income, under section
194A. This benefit shall be available also for interest from all fixed deposits
schemes and recurring deposit schemes.
·
Raising the limit of deduction for
health insurance premium and/ or medical expenditure from `30,000/-
to `50,000/-,
under section 80D. All senior citizens will now be able to claim benefit of
deduction up to `50,000/- per annum in respect of any health
insurance premium and/or any general medical expenditure incurred.
·
Raising the limit of deduction for
medical expenditure in respect of certain critical illness from, `60,000/- in case of senior citizens and from `80,000/- in case of very senior citizens, to `1 lakh
in respect of all senior citizens, under section 80DDB.
These
concessions will give extra tax benefit of `4,000
crores to senior citizens. In addition to tax concessions, I propose to extend
the Pradhan Mantri Vaya Vandana Yojana up to March, 2020 under which an assured
return of 8% is given by Life Insurance Corporation of India. The existing
limit on investment of `7.5
lakh per senior citizen under this scheme is also being enhanced to `15 lakh.
Comments