Only 2.5 percent of the Indian population constitutes of the total taxpayers since India is a developing country and only those with an annual income of Rs. 2.5 lakh are supposed to be paying income tax for the services and facilities that the country provides its citizens.
Budget 2018 was announced on February 1 and even though there is not any change in the tax slabs which was highly anticipated, there are other ways in which the new budget can help you save in the direct and corporate income tax.
1. Standard Deduction of Rs. 40,000
Standard deduction has been introduced because according to the government, the business class had it better than the salaried class and thus in the position of the transport allowance and medical reimbursements, this standard deduction of Rs. 40,000 is introduced which will let each taxpayer save on the income tax.
2. Corporate tax of 25% extended to companies
In benefit to the corporate sector, companies with a total turnover of 250cr or more will be benefitted as 25% tax is extended to such companies.
3. Housing loan will help reduce tax bill
You can use the interest on your house loan as a deduction. Along with the interest paid in the current year, you can take additional tax deduction during the construction year. This advantage can be used up to 5 years from the purchase of the property until the end of construction.
4. Increased deduction of tax for Senior citizens
All senior citizens can claim the benefit of Rs. 50,000 per annum with respect to any health insurance or general medical expenditure.
5. 100% tax deduction to farm cooperatives
According to the latest issue of budget, 100% tax deduction will be offered to companies registered as farmer producer companies with a turnover of 100cr or above for 5 years.