The Union Budget has held the income tax rate and structures unmodified. However, FM Arun Jaitley opt to offer relief to tax-paying citizens by declaring a general deduction of Rs.40,000 categorized under the label of transport & medical allowance.
Mr. Jaitley further said extra sops for old and senior citizens. Interest of up to Rupees fifty thousand garnered on fixed deposits by senior citizens will be an exemption from taxation as against previous Rs.10,000. TDS will not be needed to be deducted under sec. 194A and it has been applicable to all fixed deposit & recurring deposit schemes.
Income tax deduction sealing on health insurance premium & medical costs incurred by senior citizens as well as very senior citizens who are above 80 years old has been hiked to fifty thousand rupees under Section 80 D.
Also expenses done on critical illness by senior citizens will too exempted up to rupees one lakh as against INR 60,000 for senior citizens and INR 80,000 for very sr. citizens.
The Minister also proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March 2020 and increased the limit to ₹15 lakh a senior citizen.
4% health & education cess proposed
Further Mr. Jaitley quoted to overlay the prevailing 3% education cess on personal income & corporation tax with a four percent Health and Education Cess’ to handle the education and health requirements of the poor & rural families.
Currently, a 3% cess, comprising two percent cess for primary education and 1% cess for secondary & higher education, is attracted on personal income tax & corporation tax.