Sec. 80D: Deduction in respect of Medical Insurance Premium

Eligibility of Tax benefit of Sec. 80D: -
You can avail the deduction, if you have paid any premium on medical policy U/s 80D taken for-

• Self,
• Spouse,
• Dependent Children,
• Parents.

Amount of Deduction:

In case of an individual, amount paid in respect of Medical insurance, Preventive health checkup and Central Govt. Health Scheme for person described below, shall avail deduction, Subject to Limit given below: -

• For Self, spouse and dependent children: Rs. 25000/- ( Rs.30000/-* if person is a senior citizen** for A.Y. 2018-2019..).
• For parents of the assessee: (Additional) of Rs. 25000/- (Rs.30000/-* if person is a senior citizen** for A.Y. 2018-2019).

In case of HUF, amount paid in respect of Medical Insurance, Preventive health checkup and CGHS for any member of family, shall avail deduction, subject to limit:-

• Premium up to Rs. 25000/- (Rs. 30000/-* if any member insured is a senior citizen for A.Y. 2018-2019)

Deduction in respect of Medical Expenditure: -

For A.Y. 2018-2019, If the taxpayer or any of his family member is of 80 years or more and health insurance premium is not paid, a deduction of medical expenses up to Rs.30,000/- can be claimed. From A.Y. 2019-20 this deduction has been increased to Rs.50,000/- and is also available to a person of 60 years or more

Mode of Payments:

Payment should be made by any mode other then cash (however, payment for preventive health checkup can be made in cash.)

NOTE: 

* Rs. 30000/- increased to Rs. 50000/- for A.Y. 2019-2020

** Senior Citizen: Any resident individual of the aged 60 yrs. or above.

*** Deduction for Preventive health checkup shall not exceeds in aggregate of Rs. 5000/-

Standard Deduction for Salaried Individual under Section-16(ia) from A.Y. 2019-2020

From Budget 2018, introduced a Standard deduction of Rs. 40000/- for salaried employee from A.Y. 2019-2020
This will be in lieu of existing transport allowances and Medical expenses reimbursement.

Let us understand this with a small example:

Particulars	Until AY 2018-19	From AY 2019-20
Gross Salary (in Rs.)	5,00, 000	5,00,000
(-) Transport Allowance	19,200	Not Applicable
(-) Medical Allowance	15,000	Not Applicable
(-) Standard Deduction	Not Applicable	40,000
Net Salary	4,65,800	4,60,000

For Taxpayers Receiving Pension:

In a recent clarification issued by the income tax department, if a taxpayer has received pension from the former employer, it is taxable under the head ‘Salaries’. Therefore, the taxpayer shall be entitled to claim a standard deduction of Rs. 40,000 or the amount of pension whichever is less.

NPS Tax Benefit- Sec. 80CCD(1), 80CCD(1B) and 80CCD(2)

In this section, where an assessee investment or deposited in National Pension Scheme (NPS), he shall be allowed deduction, subject to this provision as be described below-

NPS tax benefit under Sec. 80CCD(1)-

1. An individual contribution to NPS, 1. for self Employed 20% of Gross total Income, 2. For employees 10% of Salary. 
2. Maximum deduction is Rs. 1,50,000/- according to Sec.80CCE- the aggregate deduction of Sec. 80C+80CCC+80CCD(1) does not exceed Rs. 150000/-
3.  Salary Means Basic Salary + DA. (Not include any other allowance and perquisite)
4. Here Employee contribution in NPS is like to be Employee contribution in PF.

NPS tax benefit under Sec. 80CCD(1B)-

1. Additional deduction of Rs.50000/- allowed to an individual assessee, for self deposited in NPS
2. Both self employed and employees avail this deduction.

NPS tax benefit under Sec. 80CCD(2)-

1. The contribution made by employer is treated as salary of the employee. Employee shall get deduction for this amount U/s 80CCD to the extent of 10% of the salary.  
2. Limit of deduction for Employer contribution is- 1. Amount contributed by employer or 2.  10% of  of Salary. Whichever is lower.
3. This is additional deduction which will not form the part of Sec.80C limit.

Deduction on interest for Senior citizens U/s - 80TTB from A.Y. 2019-2020

Sec. 80TTB newly inserted vide Budget 2018 wherein, provide deduction of Rs. 50000/-on interest income. This deduction is available to senior citizens from A.Y. 2019-2020.

This deduction is allowed on interest earned by a senior citizen includes any interest income on deposit with banking company or banking institution to which Banking regulation Act,1949 applies -

• From saving account with a bank, co-operative bank and post office
• From Fixed deposit ,Recurring deposit(RD) and time deposit.

How to avail deduction :- 

1. Maximum deduction of Rs. 50000/- or,
2. Interest earned during the year from specified avobe.

                              Whichever is Lower

Note:- 

1.  Here deduction u/s 80 TTA is not allowed, when assessee get deduction U/s 80TTB.
2.  No deduction shall be allowed under this section, where interest earned by any deposit with firm,body of individual, association of person. Eg. Interest earned from Partner capital.

Deduction on Interest U/s- 80TTA

Sec. 80 TTA provide a deduction of Rs. 10000/-on interest income. This deduction is available to an individual and HUF for A.Y. 2018-19 and onward

This deduction is allowed on interest earned-

• From a saving account with a bank.
• From a saving account with a post office
• From a saving account with a co-operative Bank.

Note:- This deduction is NOT allowed on interest earned on Fixed deposit, recurring deposit(RD) and any other time deposit.

How to avail deduction: - 

1. Maximum deduction of Rs. 10000/- or,
2. Interest earned during the year as specified above.

                     Whichever is lower

Income tax slab rate for A.Y. 2018-2019

For Individual (Male or Female both below age of 60 Year.), HUF,AOP,BOI and Non resident Indian.

Income below 2,50,000	Nil
Income Exceeds 2,50,000 but up to 5,00,000	5 per cent of the amount by which total income exceeds Rs. 2,50,000
Income Exceeds Rs. 5,00,000 but up to 10,00,000	Rs. 12,500 plus 20 percent of the amount by which income exceeds Rs. 5,00,000
Income Exceed Rs. 10,00,000	Rs. 1,12,500 plus 30 percent of the amount by which income exceeds Rs. 10,00,000

For Individual Senior citizens (individual Who is age of 60 Year. or more but less then 80Year.)
 

Income below 3,00,000	Nil
Income Exceeds 3,00,000 but up to 5,00,000	5 per cent of the amount by which total income exceeds Rs. 3,00,000
Income Exceeds Rs. 5,00,000 but up to 10,00,000	Rs. 10,000 plus 20 percent of the amount by which income exceeds Rs. 5,00,000
Income Exceed Rs. 10,00,000	Rs. 1,10,000 plus 30 percent of the amount by which income exceeds Rs. 10,00,000

For Individual Super Senior Citizen  (individual who is age of 80 year. or more)

Income below 5,00,000	Nil
Income Exceeds Rs. 5,00,000 but up to 10,00,000	20 percent of the amount by which income exceeds Rs. 5,00,000
Income Exceed Rs. 10,00,000	Rs. 1,00,000 plus 30 percent of the amount by which income exceeds Rs. 10,00,000

Note:-  1. Education Cess 3% of income tax + surcharge for A.Y. 2018-2019. (4% for A.Y. 2019-2020)
2. Tax rebate of Rs. 2500 Under section 87A of income tax Act, 1961 only for individual having total income upto Rs. 3,50,000. (This rebate not for HUF)
3. Surcharge: 1. 10% of tax where total income exceed of Rs. 50 lakh.
                             2. 15% of tax where total income exceed of Rs. 1 Crore.


Tax rate for Partnership Firm:

• A Partnership firm (including LLP) is taxable at 30%

Plus: 

• Surcharge: 12% of tax where total income exceeds 1 Crore.
• Education Cess:  3% of income tax + surcharge

Penalty on late filing of Income tax return

From Assessment year 2018-2019 assesee have to pay late fees under section 234F, if assessee does not furnish the ITR on time. The taxpayer shall now be required to pay late filing fees U/s 234F.

Now be described Section 234F of Income tax Act, 1961: -

• If an assessee fails to file return on time prescribed  U/s 139, he shall pay, by way of fees, a sum of,-

1. rupee five thousand (Rs. 5000/-) if the return is not filed on or before 31st Dec. of A.Y.;
2. rupee ten thousand (Rs. 10000/-) if return filed after 31st Dec. of A.Y.

• If total income of person does not exceeds Five Lakh rupees (Rs.5,00,000/-) then late filing fees shall not exceeds one thousand rupees (Rs. 1000/-).

Changes in New ITR Forms for A.Y. 2018-2019

•  New ITR Forms requires detailed calculation of Income from Salary. The assessee may get these information from Form-16 issued by the employer.

•  Non resident assessee shall not be able to filed the ITR-1. A Non resident assessee will have to choose other form ITR-2 or ITR-3 to file the return of Income tax for A.Y. 2018-2019

• For A.Y. 2018-219 an individual or an HUF, who is a partner in a firm shall be required to file his ITR in form ITR-3. (Last Year they have option to file ITR-2)

• New ITR form allow non-resident to furnish details of any one foreign Bank A/c for the purpose of Income tax Refund. ( In Previous years we have option only for Indian bank to received Income tax Refund)

• A very good change done by income tax department in ITR-4. That is, those assessee file ITR-4 requires to provide the aggregate turnover reported by him in GST return. If any difference is found in turnover reported in GST return and ITR, presumptive taxpayers can expect a notice from deptt. to explain the mismatch in turnover. 

• In New ITR-4 more reporting will be required. In the form details of 14 financial particulars of business seeks from assessee as given below

Here Sundry creditors, Inventories, sundry debtors and Cash in hand are mandatory filed and all other are required if available.