Finance Ministry Arun Jaitley on Thursday said there were no changes to the income tax rates for individuals. The Centre has, however, introduced standard deduction from the income of a salaried individual on the basis of expenses incurred in connection with their employment duties.
“The government has made many positive changes in individual tax rates in past three years, therefore no change this year,” Jaitley said while presenting the Union Budget. The Centre has proposed a standard deduction of Rs 40,000 towards transport, medical reimbursements for salaried taxpayers. This measure will cost the government a loss of Rs 8,000 crore in revenue, Jaitley said.
This is the government’s first budget after it rolled out the Goods and Services Tax and is its last full-year budget before the general elections.
The finance minister added that there was a huge increase in tax returns filed in 2017-2018. In 2016-’17, 66.26 lakh people filed their returns, while in 2017-’18, 85.51 lakh people filed their returns, he said. Direct tax collections rose 12.6% last year and 18.7% up to January 15, Jaitley announced.
The Centre has also extended the 25% in corporate tax to companies with turnover of up to Rs 250 crore in 2016-’17. Jaitley proposed a 100% deduction for farmer-producer companies having Rs 100 crore turnover. The Budget also imposed a 10% tax on capital gains of over Rs 1 lakh without the benefit of indexing.
The finance ministry has raised education cess to 4% from 3% to collect additional Rs 11,000 crore in revenue, he said. Jaitley fixed the tax rate on distributed income of equity oriented mutual funds at 10%.
Senior citizens will benefit from a rise in the investment limit on interest-bearing Life Insurance Corporation schemes from Rs 7.5 lakh per person to Rs 15 lakh.