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Budget 2018: How Much Income Tax You Have To Pay In 2018-19

In Budget 2018-19, Finance Minister Arun Jaitley announced a standard deduction of Rs. 40,000 in place of exemptions allowed for medical reimbursement (Rs. 15,000) and transport allowance (Rs. 19,200).

HIGHLIGHTS

  1. Government did not change personal income tax rates in Budget 2018
  2. Finance Minister Arun Jaitley announced standard deduction of Rs. 40,000
  3. Education cess to be hiked to 4% from 3% for individual taxpayers

Finance Minister Arun Jaitley in Budget 2018 did not change personal income tax rates. Nor did he change income tax slabs. However, he announced a standard deduction of Rs. 40,000 in place of exemptions allowed for medical reimbursement (Rs. 15,000) and transport allowance (Rs. 19,200). The finance minister also raised cess on income tax from 3 per cent to 4 per cent for individual taxpayers. Here’s how these tax changes will impact your tax liability going forward in 2018-19 (Assessment Year 2019-20), if you are a salaried employee below 60 years.

For FY 2017-18 For FY 2018-19
Scenario – 1 (In Rs.)
Taxable Income 400000 400000
Standard Deduction 40000
Medical Reimbursement & Transport Allowance 34200
Net Taxable Income 365800 360000
Income Tax 5,964 5720
Savings 244

Scenario – 2
Taxable Income 800000 800000
Standard Deduction 40000
Medical Reimbursement & Transport Allowance 34200
Net Taxable Income 765800 760000
Income Tax 67,630 67080
Savings 550

Scenario – 3
Taxable Income 1200000 1200000
Standard Deduction 40000
Medical Reimbursement & Transport Allowance 34200
Net Taxable Income 1165800 1160000
Income Tax 167,107 166,920
Savings 187

Scenario -4
Taxable Income 1600000 1600000
Standard Deduction 40000
Medical Reimbursement & Transport Allowance 34200
Net Taxable Income 1565800 1560000
Income Tax 290,707 291720
Additional Tax 1,013

Source