Union budget 2018 announced by Finance Minister Arun Jaitley has more inclination towards the rural public. Though it received mixed responses from scholars and common people, here is an announcement to be noted by the salaried class.
For the salaried class estimated around 6% to 7% of the total Indian population, FM gave a relief by announcing the standard deduction of Rs. 40,000 per annum in their tax liability. It is true that the medical allowance of Rs. 15,000 per annum and transport allowance of Rs. 1,600 per month (Maximum of Rs. 19,200 per annum) has been withdrawn and the standard deduction is just an alternative allowance, ends up in saving of only Rs. 5,800 per annum.
But the complexity of submitting transport and medical bills to the employer for the deduction of medical and transport allowance has been relieved and now the salaried class gets the flat deduction of Rs. 40,000 as tax benefit.
Increase in Education cess
In contrast to many pre-budget surveys, FM Arun Jaitley didn’t change the income tax slabs. It is also important to note ‘Education cess’ of 3 percent imposed on personal income tax and corporate tax has been increased to 4 percent and renamed as ‘Health and Education cess’. This increases the cess collection by Rs. 11,000 crore in the fiscal year and it can facilitate the government plans for health care and educational improvement of poor and rural families.