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New Income Tax Deduction Under Section 80C For FY 2018-19 And AY 2019-20

Deduction Under Section 80C in the financial year  Budget 2018-19 has not removed the burden of much tax from the  common people.

It has proved rather a boon for senior citizens.

Latest Income Tax  Slab Rates For FY 2018-19

Tax payer can only take maximum rs 150,000 Deduction Under Section 80C .

Tax rates in FY 2018-19

Nothing has changed in the FY 2018-19.

If your total or taxable income is less than or equal to 5 lakhs, then 5% tax rate will be applicable on income after 80C deductions.

REBATE UNDER SECTION 87A IN FY 2018-19

Tax payer can claim REBATE of rs 2500,if he/she has taxable income less than or equal to 3.5 lakhs.

Here taxable income is the income after deducting 80c savings from gross total income.

Changes in the budget 2018:

Two changes have taken place in the budget 2018-19:

  • One is cess increased from 3% to 4%.and it will be called health education cess.
  • IT Dept has proposed a New section 80TTB for senior citizens.Under 80TTB They can claim Income Tax Rebate of rs 50,000 on interest income from saving bank accounts, cooperative banks or post office accounts.
  • Expenditure on health problems under Section 80D increased from rs 30,000 to rs 50,000.only for senior citizens.
  • Interest income from FD AND RD ARE ALSO NOT TAXSBLE UPTO RS 50,000.

How to calculate income tax for FY 2018-19 and AY 2019-20

SUPPOSE YOUR gross salary for FY 2018-19 is 5 lakh.Deduction Under Section 80C rs 150,000.

Thus your taxable income becomes rs 3,50000.

Now deduct first 250000 rs from 3,50000.So remaining amount will be rs 1,00000.

Hence 5% of 1,00000 is 5000.Now deduct rs 2500 Rebate under section 87A.Because your taxable income is 3.5 lakh.

So 5000-2500=2500.Further get 4% health education cess of 2500.

Which becomes rs 100.So add 2500 and 100.

Finally your income tax is rs 2600.

SENIOR CITIZENS INCOME TAX SLAB FY 2018-19 AY 2019-20

Suppose your age is greater than or equal to 60 yrs and less than 80 years.

How to calculate income tax for senior citizen.

Let us suppose your gross salary is 500000.

And Deduction Under Section 80C  is rs 150000.

So your taxable income will become rs 3.5 lakh.

As you know in case of a senior citizen there is no tax on first 300000.

So deduct 300000 from 3.5 lakh.

Remaining amount is 50,000.

5% of 50000 is rs 2500.

As your taxable income is 3.5 lakh after 80C deductions.

So deduct rs 2500 Rebate us 87A from rs 2500 which becomes zero.

Hence there is no tax in this case.

INCOME TAX SLAB FOR SUPER SENIOR CITIZENS

IF YOUR AGE IS 80 years or greater then you are super senior citizen.

And there is no tax on taxable income 5 lakh.

Conclusion:

Finally we can say that There is no change in tax slab for FY 2018-19 except increase in cess from 3% to 4%.

And Deduction Under Section 80C  remains same.

Kuldeep Singh
 

is a professional blogger,teacher and income tax expert

Click Here to Leave a Comment Below 2 comments
C Mahadevan - May 6, 2018

What about standard deduction of Rs 40,000?

Reply
    Kuldeep Singh - May 8, 2018

    Subtract 40,000 rs from your gross salary.No need for document proof.

    Reply

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