Lets understand budget 2018, Probably last full budget of Modi Givernment before 2019 LS elections, from personal Finance perspective;
Tax on LTCG on equity shares and equity mutual fund units
As per current Provision, long term capital gains arising from transfer of long term capital assets, being equity shares of a company or an unit of equity oriented fund or an unit of business trusts , is exempt from income-tax . However, transactions in such long-term capital assets carried out on a recognized stock exchange are liable to securities transaction tax (STT).
The government  has now introduced a new section 112A in the Income Tax Act, to provide that long term capital gains arising from transfer of a long term capital asset being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust, shall be taxed at 10% of such capital gains exceeding one lakh rupees. There will be no indexation benefit.
All gains up to January 31, 2018 will be grandfathered. As per the example given by the finance minister, if an equity share is purchased six months before January 31, 2018 at Rs100 and the highest price quoted on January 31, 2018 in respect of this share is Rs120, there will be no tax on the gain of Rs20 if this share is sold after one year from the date of purchase. However, any gain in excess of Rs20 earned after January 31, 2018 will be taxed at 10% if this share is sold after July 31, 2018.
The gains from equity share held up to one year will remain short-term capital gain and will continue to be taxed at the rate of 15%.
Tax on dividends of equity mutual funds
Currently, in respect of any income distributed by way of dividends to a unit holder of equity-oriented mutual funds is not chargeable to tax . Under the budget 2018, any income is distributed by a Mutual Fund being, an equity oriented fund, the mutual fund shall be liable to pay additional income tax at the rate of 10% on income so distributed. This is done in order to provide a level playing field between growth oriented funds and dividend paying funds, with the implementation of the capital gains tax regime for equity oriented funds.
For Salaried :
Standard deduction of Rs 40,000 for salaried income
Section 16 provides for certain deduction in computing income chargeable under the head Salaries. From AY2019-20 onwards, the Income Tax Act will allow a standard deduction up to Rs 40,000 or the amount of salary received, whichever is less.
Consequently, the present exemption in respect of Transport Allowance (except in case of differently abled persons) and reimbursement of medical expenses will be withdrawn. Other medical reimbursement benefits in case of hospitalization etc., for all employees shall continue.
Health and Education Cess on personal income tax
Education Cess on income-tax and Secondary and Higher Education Cess on income-tax shall be discontinued. However, a new cess, by the name of Health and Education Cess shall be levied at the rate of 4% of income tax including surcharge wherever applicable, in the cases of persons not resident in India including company other than a domestic company.
NPS tax benefits extended to all subscribers
Under the existing provisions of the clause (12A) of section 10 of the Act, an employee contributing to the NPS is allowed an exemption in respect of 40% of the total amount payable to him on closure of his account or on his opting out. This exemption is not available to non-employee subscribers. In order to provide a level playing field, clause (12A) of section 10 of the Act will be amended to extend the said benefit to all subscribers.
Proportionate deduction for single premium health insurance policy
The Finance Bill 2018 provides that in a case where premium for health insurance for multiple years has been paid in one year, the deduction shall be allowed proportionately over the years for which the benefit of health insurance is available, subject to the specified monetary limit.
Incentives for new employees
The finance minister announced that the Government will contribute 12% of the wages of the new employees in the Employees Provident Fund EPF for all the sectors for next three years. Also, the facility of fixed term employment will be extended to all sectors.
Incentive to encourage employment of women
To incentivize employment of more women in the formal sector and to enable higher take-home wages, the finance minister proposed to make amendments in the Employees Provident Fund and Miscellaneous Provisions Act, 1952 to reduce women employees contribution to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers contribution.
For Senior Citizens :
Exemption of TDS for senior citizens
Exemption of interest income on deposits with banks and post offices to be increased from Rs10,000 to Rs50,000 and TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
Deduction on interest income increased for senior citizen
At present, a deduction upto Rs 10,000 is allowed under section 80TTA to an assessee in respect of interest income from savings account. A new section 80TTB will now be inserted, so as to allow a deduction upto Rs 50,000 in respect of interest income from all deposits held by senior citizens. However, no deduction under section 80TTA shall be allowed for senior citizens in these cases.
Limit on health insurance increased for Senior citizens
Section 80D provides that a deduction upto Rs 30,000 shall be allowed to an assessee, being an individual or a Hindu undivided family, in respect of payments towards annual premium on health insurance policy, or preventive health check-up, of a senior citizen, or medical expenditure in respect of very senior citzen. The Finance Bill will now amend section 80D so as to raise this monetary limit of deduction from Rs 30,000 to Rs 50,000.
All senior citizens will now be able to claim benefit of deduction up to Rs 50,000 per annum in respect of any health insurance premium and/or any general medical expenditure incurred.
Limit on medical expenditure in respect of certain critical illness increased for senior citizens
Section 80DDB of the Income Tax Act, provides that a deduction is available to an individual and Hindu undivided family with regard to amount paid for medical treatment of specified diseases in respect of very senior citizen upto Rs 80,000 and in case of senior citizens upto Rs 60,000 subject to specified conditions.
The budget has now raised the limit of deduction for medical expenditure in respect of certain critical illness from, Rs 60,000 in case of senior citizens and from Rs 80,000 in case of very senior citizens, to Rs 1 lakh in respect of all senior citizens, under section 80DDB.
Rationalization of the provisions of section 54EC
Section 54EC of the Act provides that capital gain, arising from the transfer of a long-term capital asset, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, shall not be charged to tax subject to certain conditions specified in the said section.
The section also provides that “long-term specified asset” for making any investment under the section means any bond, redeemable after three years and issued by the National Highways Authority of India or by the Rural Electrification Corporation Limited; or any other bond notified by the Central Government in this behalf.
The Finance Bill 2018, attempts to rationalise the existing provision relating to investment in capital gain bonds by providing that the exemption shall be available only in respect of long-term capital gains arising out of sale of immoveable property and investment in the bond shall be for a minimum period of 5 year from the existing 3 years.
Section 54EC will now be amended so as to provide that capital gain arising from the transfer of a long-term capital asset, being land or building or both, invested in the long-term specified asset at any time within a period of six months after the date of such transfer, the capital gain shall not be charged to tax subject to certain conditions specified under the section.

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