Several Budget proposals, including the reintroduction of tax on long term capital gains (LTCG) exceeding Rs 1 lakh from sale of shares, will kick in from April 1, the beginning of 2018-19 financial year.
Besides, other tax proposals like reduced corporate tax of 25 per cent on businesses on a turnover of up to Rs 250 crore and a standard deduction of Rs 40,000 in lieu of transport allowance and medical reimbursement, will come into effect from 01 April 2018.
For senior and very senior citizens, tax deduction for critical illness will be Rs 1 lakh from April 1 against the existing limit of Rs 60,000 for senior citizens and Rs 80,000 for very senior citizens. In July 2004, the government had abolished LTCG tax on shares and replaced it with the securities transaction tax (STT) – a same-day tax credit system that continues.
Keeping the income tax rates and slabs unchanged, the Budget had introduced a Rs 40,000 standard deduction for salaried employees and pensioners in lieu of the present exemption in respect of transport and medical expenses.
In the last regular Budget of the present NDA Government, Finance Minister Arun Jaitley had retained the 10-15 per cent surcharge on super-rich, while raising the health and education cess, levied on all taxable income, to 4 per cent from 3 per cent at present.