LTCG tax, other proposals to kick in from April 1

NEW DELHI: Several budget proposals including the reintroduction of the tax on longterm capital gains(ltcg) exceeding Rs 1 lakh from the sale of shares will kick in from April 1, the beginning of the 2018-19 financial year.

Besides, other tax proposals like a reduced corporate tax of 25 percent on businesses on turnover of up to Rs 250 crore and a standard deduction of Rs 40,000 in lieu of transport allowance and medical reimbursement will come into effect from Sunday.

While the exemption limit on income from interest for senior citizens has been raised five times to Rs 50,000 per year, the limit of deduction for health insurance premium and medical expenditure has been raised to Rs 50,000 from Rs 30,000 under section 80D of the I-T Act.

For senior and very senior citizens, the tax deduction for critical illness will be Rs 1 lakh from April 1, as against the existing limit of Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens.

In the last regular Budget of the present NDA government, Finance Minister Arun Jaitley had retained the 10-15 percent surcharge on the super-rich, while raising the health and education cess, levied on all taxable income, to 4 percent from 3 percent at present.

These proposals too will come into effect from Sunday.

The 2018-19 Budget had after a gap of 14 years reintroduced 10 per cent tax on LTCG exceeding Rs 1 lakh from the sale of shares.

Currently, 15 per cent tax is levied on capital gains made on share sale within a year of purchase. However, it is nil for shares sold after a year of purchase.

However, indexation benefit for computing tax liability on the sale of shares listed after January 31 will be available, which will come as a relief to investors.

Keeping the income tax rates and slabs unchanged, the Budget introduced a Rs 40,000 standard deduction for salaried employees and pensioners in lieu of the present exemption in respect of transport and medical expenses.