While Union Budget 2018 was being announced by Finance Minister Arun Jaitley on Thursday, crores of working Indians were listening to it with much anticipation in the hope of favourable restructuring in income tax slabs. But the latest Budget went in vain for the working lower and middle class who were seeking a new IT slab. Although Arun Jaitley began his part of speech on Income Tax by saying honest tax payers will be rewarded, the end result was not too rewarding.
In the new Budget, there were no changes announced in the Income Tax slab for the current fiscal year but a standard deduction of Rs 40,000 in lieu of transport and medical reimbursements for salaried classes was proposed. Also, there will be no TDS on Fixed Deposits while exemption of interest income on bank deposits will be raised to Rs 50,000 for senior citizens.
Before announcing the changes in the income tax slabs, Arun Jaitley gave analysis of increased Indian tax payers and what is in future’s kitty for them. He said that last year there were a total of 66.2 lakh tax payers which significantly increased to 85.32 lakh this year. He also said that there were 85.59 lakh new tax payers in 2016-17 and they were increased from over 6 crore in 2014-15 to 8.27 crore by end of 2016-17. Interestingly, 41% more returns were filed under Presumptive Income Scheme.
Announcing new sops, the Finance Minister assured 100% tax deduction for first five years to companies registered as farmer producer companies with a turnover of Rs 100 crore and above. The much-debated corporate tax will be reduced to 25% from 30% for companies with turnover under Rs 250 crore while the corporate tax of 7 lakh companies which are filing returns above Rs 250 crore will remain at 30%.