Taxpayers are always required to keep a track of the latest amendments introduced by the Department of Income Tax. May it be a salaried individual or a businessman, it is necessary for everyone to abide by the latest guideline and compute their tax li ability accordingly. The current financial year would be coming to an end on 31 March 2018 and by that time you would be required to get ready to pay your taxes. However, make sure that your tax liability is cleared before 31 July 2018.
Here are 5 changes you need to focus while computing your taxes for filing tax returns this year –
CHANGE #1 – Rate of taxation is now 5%
As an individual, the applicable rate of taxation this year is 5%, if your income is in between ₹2.5 lakhs to ₹5 lakhs. Earlier, the same was 10%. Nonetheless, it should be noted that the other taxation rates remain unchanged.
Recommended: Income Tax Slab for A.Y.2018-19
CHANGE #2 – Lesser rebate (now only ₹2500)
The benefit of rebate was earlier ₹5000. But from the current period tax payers would only get ₹2500 as rebate. Moreover, individuals whose income is ₹3.5 lakhs or lower are only entitled to avail this rebate.
CHANGE #3 – Introduction to Surcharge @ 10%
From this year onward, individuals whose taxable income is atleast ₹50 lakhs but not more than ₹1 crore are required to pay a surcharge of 10%. If an individual’s income exceeds ₹ 1 crore, then an additional surcharge of 15% is applicable on the taxable income.
Recommended: Income Tax Calculator for A.Y.2018-19 & A.Y.2019-20
CHANGE #4 – Limitation on setting off losses on rented property
From this year onward, the benefit of setting off of losses on rented property has been restricted. Earlier there were no such restrictions and an individual could set off his/her losses from income from house property over a period of 8 years. As per the current amendment, a maximum of ₹2 lakhs can be set off against any income under ‘loss from rented property’.
CHANGE #5 – Fee on late filings
With effect from the current year, the Department of Income Tax has explicitly mentioned that failure to file tax within the given time will attract a fee of ₹5000, provided the same is filed within 31 December 2018. In case the total income of the tax payer is less than ₹5 lakhs, then a fee of ₹1000 is applicable on late filing.
Thus, we find that there are a lot of things that a tax payer will need to keep in mind at the time of filing his return. Right from the rate of taxation to the amount of rebate, everything has been changed a bit. In case you need a support from us on understanding the scope or changes better, feel free to place your questions n the comment section and we shall be glad to answer them. Income tax for AY 2018-19 should be filed on or before 31 July 2018, so don’t be late on it!