Standard Allowance to Salaried Employees in Place of Medical Allowance or Reimbursement, and Transportation Allowances

 

Treatment up to Financial Year 2017-18 ( Assessment Year 2018 - 19 ): -

 

Medical Allowance: - Any Fixed amount of Money Received by Employee from Employer every Month i.e. Medical Allowance is Fully Taxable in Hands of Employee irrespective of amount of Payment and Irrespective of type of Employee.

Medical Reimbursements: -   Exemption shall be granted to Employee subject to Certain Conditions. Conditions for Getting Exemption for Medical Reimbursement: -

Any amount Spent by Employer on Treatment of Employee, Spouse of Employee, Children of Employee, Mother and Father of Employee, Brother and Sister of Employee is fully exempt when Treatment in any Government Hospital, Employer’s Own Hospital and Any Other Government Recognized Hospital in India.

 Any amount Spent by Employer on Treatment of Employee, Spouse of Employee, Children of Employee, Mother and Father of Employee, Brother and Sister of Employee is fully exempt subject to Limit Prescribed by RBI when Treatment is done outside in India.

Any Amount Received by Employee from Employer as Reimbursement for Medical Treatment in any Hospital is fully exempt from Tax subject to Maximum Limit of Rs. 15000 can claim as exemption.

Transportation Allowances: - 100% Exemption of Transportation Allowances Received by Employee from Employer subject to Maximum of Rs. 1600 Per Month and Rs. 3200 in case Handicapped Employee.

Standard Deduction: - There is no Provision of Standard Deduction in Income Tax up to Financial Year 2017 -18 ( Assessment Year 2018 - 19 ).

 

Changes with Effect from Financial Year 2018-19 ( Assessment Year 2019 - 20 ): -

Medical Allowance:  - Any Fixed amount of Money Received by Employee from Employer every Month i.e. Medical Allowance is Fully Taxable in Hands of Employee irrespective of amount of Payment and Irrespective of type of Employee.

Medical Reimbursement: - Any amount Spent by Employer on Treatment of Employee, Spouse of Employee, Children of Employee, Mother and Father of Employee, Brother and Sister of Employee is fully Taxable  when Treatment in any Government Hospital, Employer’s Own Hospital and Any Other Government Recognized Hospital in India or Outside India. 

Transportation Allowance: - Any Money Received by Employee from Employer in Respect of Transportation Allowance shall be fully taxable. 

Standard Deduction: - From Financial Year 2018-19 Standard Deduction of Rs. 40000 shall be provided to Salaried Employee in Place of Medical Reimbursement and Transportation Allowances to Employees without any Investment or Expenditure by Employee. Such Standard Deduction shall be provided irrespective of Allowances given to Employee or actual money spent on Medical Expenditure.

 

Rate of Education Cess to b increase from 3% to 4%

 

Rates of Education Cess up to Financial Year 2017-18 ( Assessment Year 2018 - 19 ): -

Primary Education Cess at Rate of 2% on Tax Payable plus Surcharge (if any)

Secondary and Higher Education Cess at the Rate of 1% on Tax Payable plus Surcharge (if any).

 

Rates of Education Cess for Financial Year 2018-19 ( Assessment Year 2019 - 20 ) and onwards: -

Education will replaced by Health and Education Cess and Rate of Health and Education Cess will be at Rate  of 4% on Tax Payable plus Surcharge (if any).

 

Long Term Capital Tax on Investment in Equity

 

Taxability of Long Term Capital Gains from Investment in Equity Shares up to Financial Year 2017 -18 (Assessment Year 2018-19): - 

Any Long Term Capital Gain from Investment in Equity share on Securities Transaction Tax (STT) is Paid then such Capital Gain Tax is fully exempted from Tax under sec 10(38) of Income Tax Act.   

 

Taxability of Long Term Capital Gains from Investment in Equity Shares for Financial Year 2018-19 (Assessment Year 2019-20) and own wards: -

Any Long Term Capital Gain from Investment in Equity share on Securities Transaction Tax (STT) is Paid then such Capital Gain Tax is exempted from Tax under sec 10(38) of Income Tax Act up to Rs. 1 Lakh. Any amount Capital Gain Exceeding Rs.  1 Lakh will be Taxable at Rate of 10% in hands of Investor.

 

Exemption from Tax on Withdrawal from National Pension Scheme (NPS)

 

Exemption from Tax up to Financial Year 2017-18 (Assessment Year 2018 -19): -

 Any Amount withdrawal from National Pension Scheme (NPS) by Employee Subscriber will be exemption from Tax up to 40% of Money Payable to Employee Subscriber on Closure of Account or opting out from National Pension Scheme. However NO Exemption shall be granted to Non Employee subscriber.

 

Exemption from Tax for Financial Year 2018 -19 ( Assessment Year 2019 - 20 ): -

Any Amount withdrawal from National Pension Scheme (NPS) by Employee Subscriber will be exemption from Tax up to 40% of Money Payable to Employee Subscriber on Closure of Account or opting out from National Pension Scheme.

 

Deduction in Respect of Interest on Saving Account or Interest on Fixed Deposits

 

Deduction in respect of Interest from Taxable Income up to Financial Year 2017-18 ( Assessment Year 2018 - 19 ): -

100% Deduction shall be allowed in respect of Interest earned by any Individual or Hindu Undivided Family (HUF) form any Bank or Post on saving account held be such asseessee.

 

Deduction in respect on Interest on Deposit held by Senior Citizens with Bank and Post Offices for Financial Year 2018 - 19 ( Assessment Year 2019 - 20 ) : - 

100 % Deduction shall be allowed to senior citizens in respect of Interest Earned by senior citizens on any Deposits held with banks or Post office.

 

Lowe Rate of Taxation for Small Companies

 

Lowe Rate of Tax for Financial Year 2017 - 18 ( Assessment Year 2018-19): - 

Any Company having its turnover upto Rs 50 Lakh in Financial Year 2015 -16 ( Assessment Year 2016-17 ) can pay its Tax the Rate of 25%.

 

Lowe Rate of Tax for Financial Year 2018 - 19 ( Assessment Year 2019 - 20): - 

Any Company having its turnover upto Rs 250 Lakh in Financial Year 2016 - 17 ( Assessment Year 2017 - 18 ) can pay its Tax the Rate of 25%.