Income Tax Rules that changed from April 1

*8 Income Tax Rules That Changed From April 1* *1) Rs. 40,000 standard deduction introduced:* in place of existing deductions of Rs. 19,200 for transport allowance and Rs. 15,000 for medical reimbursement. *2) Higher cess:* The finance minister also raised cess on income tax to 4 per cent from 3 per cent for individual taxpayers on the amount of income tax payable. *3) Introduction of long-term capital gains tax on equity investments.* *4) Tax on dividend income from equity mutual funds:* Tax at the rate of 10 per cent will be levied on dividend distributed by equity-oriented mutual funds. *5) Income tax benefits on paying multi year health insurance policy premium :* Under the proposed changes in Budget 2018, in case of single premium health insurance policies having cover of more than one year, deduction will be allowed on a proportionate basis for the number of years for which health insurance cover is provided, subject to the specified limit. *6) Income tax benefit on NPS withdrawal:* From financial year 2018-19 exemption in respect of 40 per cent of the total amount payable on closure of account or on opting out will now be available to non-employee subscribers too. *7) Deduction in respect of interest income to senior citizens:* Limit increased from Rs 10,000 to Rs 50,000. *8) Higher deduction limit under Section 80D (medical insurance) of the Income Tax Act for senior citizens:* The limit is set to go up from Rs. 30,000 Rs. 50,000. For individuals below 60 years of age, the deduction under Section 80D continues to be Rs. 25,000. But if their parents are senior citizens, above 60 years, they can claim an additional deduction of up to Rs. 50,000-taking the total deduction to Rs. 75,000 (Rs. 25,000 + Rs. 50,000), higher than the current limit of Rs.55,000.