Budget 2018 impact on your taxes: Who saves and who pays more :- No change in income tax slab for individuals  Cess on income tax hiked to 4%  EPF contribution of new women workers capped at 8%  Exemption of interest income on deposits to be hiked for senior citizens  Budget proposes to hike PMVVY limit to rs 15 lakh  FM proposes DDT on equity MF, dividend seekers to be hit .

1. Guided By:-
Prof. Rupal Choudhary
MBA (ft) 2nd sem sec-D
Submitted by:-
Kratika Porwal
Aditi Maheshwari
Rishi Lodhi
Sheetal Patel

2. BUDGET 2018 and its impact on
INDIAN ECONOMY

3. Overview
Budget 2018 impact on your taxes: Who saves and who
pays more
 No change in income tax slab for individuals
 Cess on income tax hiked to 4%
 EPF contribution of new women workers capped at 8%
 Exemption of interest income on deposits to be hiked for
senior citizens
 Budget proposes to hike PMVVY limit to rs 15 lakh
 FM proposes DDT on equity MF, dividend seekers to be
hit .
 Long-term cap gains tax may return

4. 1.Agriculture
 MSP for Kharif crops will be 1.5x cost of
production.
 Allocation to Ministry of Food Processing is
being doubled to INR 1400 cr
 INR 500 cr for 'operation green' to promote
FPOs, agri logistics and processing
 Agri-Market Infrastructure Fund with a
corpus of INR 2000 cr
 State of art facility for 42 mega food parks
for agri exports
 Allocation of INR 10,000 cr for fisheries,
aquaculture and animal husbandry

5. Cont….
Impact
1.Farmers will get relief.
2.Agricultural related sectors get boost.
3.The money will be used to extend the coverage
of the scheme and help the country in reducing
the cost of credit. This will help in reducing the
logistics cost of the country.

6. 2. Changes to Tax on dividends
from Mutual Funds
 Before budget 2018
Dividends received from all mutual funds were tax-free
in the hands of the investors. However, in the case of
debt funds, the fund houses had to pay Dividend
Distribution Tax (DDT). The DDT in debt mutual funds
was introduced to reduce the bring bank fixed deposits
and debt funds on almost equal footing. However, in an
equity oriented mutual fund, there was no DDT.
 After budget 2018
With effect from 01–04–2018, dividend from equity-
oriented mutual funds will be subject to DDT at the rate
of 10%, to provide a level playing field growth-oriented
funds and dividend paying funds. The fund houses will
have to deduct DDT before declaring dividend.
 Impact
DDT will reduce the in-hand return to investor, if the
dividend option is opted for. Dividend, however, remains
tax-free in the hands of the investor.

7. 3. Changes to Education Cess
 Before budget 2018
A cess of 3% of income tax payable was added
to the tax liability. This 3 per cent constituted-
2% education cess and 1% senior secondary
education cess.
 After budget 2018
The budget proposes to hike the cess on
income tax from current 3% to 4% to help
cover the costs of government-sponsored
programmes in health and education.
 Impact
There will be an increase in the tax payable by
all categories of tax payers.

8. 4. The 2018 Standard Deduction
 Before budget 2018
Medical bills of up to Rs.15,000 per financial year
were reimbursable to employees by employers and
this was tax-free for the employees. Transport
allowance of Rs.19200 per financial year was also
allowed to be paid to employees which was also
not taxable in hands of the employees.
 After budget 2018
The budget proposes to provide a standard
deduction of Rs.40,000 from salary income to
employees but also proposes to take away
transport allowance and medical reimbursement.
 Impact
Employees having any medical expenses were able
to get a deduction of Rs.34,200 (i.e. medical
reimbursement Rs.15,000+ Transport allowance
Rs.19,200).

9. 5.EMPLOYMENT GENERATION
I. Govt. contribution of 12% of the wages of the new
employees in the EPF for all the sectors for next 3 years:
II. Relaxation in individual income tax.
III. Reduction in women employees' contribution to 8% for first
3 yrs of their employment.
IV. Setting up of a model aspirational skill centre in every
district of the country.
Impact
 The former will make it easy to hire workers thereby
encouraging them to hire more ,the later will help incentivise
employees creating more jobs.
 Will boost consumer buying power and will increase
employment by at least 5-10%
 Women employees will benefit with higher salary in hand,
indirectly giving a push to the consumption cycle.

10. Changes and Benefits
for Senior Citizens in
the 2018 Budget

11. 1. Deduction in respect of medical
treatment of certain critical
illnesses
 Before budget 2018
As per Section 80DDB,
• A deduction of a sum upto Rs.40,000 paid for the medical
treatment of certain chronic and protracted diseases such as
Cancer, full blown AIDS, Thalassaemia, Haemophilia etc.
• This deduction is allowed up to Rs.60,000 where the expenditure
is in respect of a senior citizens (60 or above) and Rs.80,000 for
very senior citizens (80 or above).
• The above deduction is available to an individual for himself or a
dependant relative. (Dependant in case of an individual means the
spouse, children, parents, brother or sister of an individual)
• For HUF, it is available for its members. (Dependants for HUF
means a member of the HUF)
 After budget 2018
The budget proposes an increase in deduction limit to Rs.1,00,000
for all senior citizens.
 Impact
All senior citizens may get benefit of extra deduction of Rs.40,000
and all very senior citizens will get extra deduction of Rs.20,000.

12. 2. Pradhan Mantri Vaya
Vandana Yojana (PMVVY)
 Before budget 2018
-PMVVY is a Pension Scheme announced by the
Government of India exclusively for the senior citizens
aged 60 years and above which was available from 4th
May, 2017 to 3rd May, 2018.
-The scheme can be purchased by payment of a lump
sum Purchase Price. The maximum purchase price limit
was Rs.7,50,000.
 After budget 2018
-It is proposed to extend this yojana up to March,
2020.
-Current investment limit proposed to be increased to
Rs.15,00,000 from the existing limit of Rs.7,50,000 per
senior citizen.
 Impact
-Senior citizens can now avail benefits of this Yojana for
another 2 years and earn higher interest.

13. 3. Deduction in respect of
health insurance premium
 Before budget 2018
As per Section 80D,
 Investments made towards payment of health insurance premium
and preventive health check-ups qualify for a tax deduction.
 Individual assesses can claim deduction for premiums paid
towards health insurance of self, spouse, parents and children.
HUF can claim deduction for insuring the health of any member of
the HUF.
 The deduction that can be claimed by an assesse is up to
Rs.25,000 for premium paid for self, spouse and dependent
children if under the age of 65 and Rs.30,000 if above the age of
65 years.
 A further deduction of Rs.25,000 could be claimed, for buying
health insurance policy for parents of the assesse. It is Rs 30,000
if either of the parents is a senior citizen.
 After budget 2018
-The limit of Rs.30,000 for senior citizens is now increased to
Rs.50,000.
 Impact
-All senior citizens may get benefit of extra deduction of Rs.20,000.

14. 4. Interest income from deposits
 Before budget 2018
-A deduction upto Rs 10,000/- is allowed under section 80TTA
to an assesse in respect of interest income from savings
account.
 After budget 2018
-It is proposed to insert a new section 80TTB so as to allow a
deduction up to Rs.50,000/- in respect of interest income from
deposits (all fixed deposit schemes and recurring deposit
schemes) held by senior citizens. However, no deduction under
section 80TTA shall be allowed in these cases. (This amendment
will take effect from 1st April, 2019 and will, accordingly, apply
in relation to the assessment year 2019–20 and subsequent
assessment years)
-It is also proposed to amend section 194A so as to raise the
threshold for deduction of tax at source on interest income for
senior citizens from Rs.10,000/- to Rs.50,000/-. (This
amendment will take effect, from 1st April, 2018)
 Impact
-The increase in tax exemption limit for interest income for
senior citizens will be a big relief as this category derives most
of its income from bank FDs and post office schemes.

15. THANK YOU….