Budget 2018: I-T Slab Unchanged; Standard Deduction Revived

ONI Bureau: Contrary to the expectations, the Modi Government kept the income tax slab for salaried employee unchanged. However, it gave partial relief to the taxpayers by reviving the standard deduction facility.

The standard deduction has been raised to Rs 40,000 to the salaried class in lieu of transport and medical reimbursements.

The Govt proposed to raise the deduction under health insurance premium to Rs 50,000. In case of senior citizens with critical illnesses, the deduction will be Rs 1 lakh. Fixed deposits and post office interest will be exempted till Rs 50,000 and 80D benefit has been enhanced to Rs 50,000.

I-T Slab:

Rs 0 -Rs 2.5 lakh – 0%
Rs 2.5-5 lakh – 5%
Rs 5-10 lakh – 20%
Rs 10 lakh & above – 30%.

The Government has also increased the cess on health and education to 4% from the existing 3%. Corporate Tax has been reduced to 25% from 30% for companies having Rs 250 crore annual turnover.

Note: Standard deduction allows for a flat deduction from income of a salaried individual towards expenses an employee would incur in relation to his or her employment. No proof is required.