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Income Tax Slab | Impact Of 2018 Budget On Tax

India has witnessed its first post GST (Goods and Service Tax) budget; Budget 2018. The budget this year was highly disappointing for people as there is no change has been introduced in the tax slabs. It has in turn raised the liability of citizens except some categories such as senior citizens. The senior citizen tax has come down by almost Rs. 15, 450 due to the tax exemption for up to Rs. 50, 000 interest earned from bank deposits and Post Office Schemes.

Other than few of these exceptions, the budget has hiked the percentage on tax from 3 % to 4 % for all tax payers. According to this, a tax payer who earns 60 lakh in a year will pay Rs. 13,354 more in tax and on the other hand a high – income tax payer who earns nearly 1.2 crore will pay 33,868 more.

On this matter, one of the dealers said that

Rich taxpayers who were expecting some relief in surcharge are disappointed. They will pay more tax next year.

However, in the budget, Arun Jaitley has announced that standard deduction of Rs. 40,000 will be granted for salaried individuals.

Let us look at the below mentioned chart to see the impact of budget 2018 on tax:

  1. Retired Pensioner

Income 9 Lakh

Deductions

Sec 80 C 1.5 lakh
Medical Insurance 30,000
Existing Tax 55,620
After Budget 41,600

Savings In Tax – 14,020

  1. Low – Income Earner – Negligible Tax Cut, Gross Income – Rs. 6 lakh

Deductions

Sec 80 C 1.5 lakh
NPS Contribution 50,000
Medical Insurance 15,000
Existing Tax 6,953
After Budget 6,718

Savings In Tax – 234

  1. Mid Income with Home Loan, Gross Income – Rs. 12 lakh

Deductions

Sec 80 C 1.5 lakh
NPS Contribution 50,000
Medical Insurance 20,000
Home Loan 2 lakh
Existing Tax 70,555
After Budget 70,033

Savings In Tax – 521

  1. High Income Earner, Gross Income – Rs. 60 lakh

Deductions

Sec 80 C 1.5 lakh
NPS Contribution 3.5 lakh
Medical Insurance 25,000
Home Loan 2 lakh
Existing Tax 15.81 lakh
After Budget 15.93 lakh

Additional Tax Payable – 13,354

  1. Very High Income Earner, Gross Income – Rs. 1.2 Crore

Deductions

Sec 80 C 1.5 lakh
NPS Contribution 5.5 lakh
Medical Insurance 55,000
Home Loan 2 lakh
Existing Tax 37.02 lakh
After Budget 37.36 lakh
Additional Tax Payable – 33,868

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