How your financial life is going to change completely from April 1
From tomorrow, a large number of Indians will see significant changes in their financial life. April 1 is the first day of the next financial year, 2018-19. The Budget proposals for the new financial year, announced on February 1, will come into force from tomorrow. Below are the key changes which are going to affect individuals as well as companies:
All taxpayers
All taxpayers will pay a bit of more tax due to hike in and education cess. Budget 2018 had proposed to hike cess on income tax from 3% to 4% thereby increasing the tax payable by all categories of tax payers. Due to this change, the tax liability for highest tax bracket (assuming Rs 15 lakh income) goes up by Rs 2,625. For the middle income tax payers (between Rs 5 lakh and Rs 10 lakh), tax liability increases by Rs 1,125, and for the lowest bracket (Rs 2.5 lakhs to Rs 5 lakhs) by Rs 125
If you have lots of money earning interest, you need not bother about tax as much as you used to. The exemption limit on income from interest for senior citizens will now be five times higher to Rs 50,000 per year. Those planning to upgrade or buy insurance will benefit from higher limit of deduction for health insurance premium and medical expenditure which has been raised to Rs 50,000 from Rs 30,000 under section 80D of the I-T Act.
The Budget proposed a standard deduction of Rs 40,000 in lieu of transport allowance and medical reimbursement. This will kick in from April 1. Presently, no tax is applicable on Rs 19,200 of transport allowance and medical expenditure of up to Rs 15,000. This has now been subsumed into the new standard deduction of Rs 40,000.
Small businesses
If the turnover of your company is up to Rs 250 crore, you have a big reason to cheer. You will pay less corporate tax, at 25 per cent. As 99 per cent of the tax-filing companies fall in this bracket, this is really a big change.
Drivers
If you drive on national highways, get ready to pay more from April 1. National Highways Authority of India has revised its toll rates by 5 to 7 per cent. The rates have been revised on the basis of Wholesale Price Index (WPI) and may vary from one toll plaza to another in the same region.
Every companies will have to adopt more detailed revenue recognition ways from April 1 as the government has notified a new accounting standard. Indian Accounting Standard (Ind AS) 115 would be effective from the new financial year, that is tomorrow. Once it is in force, the other two standards, Ind AS 18 and 11, which are related to revenue and construction contracts, would be withdrawn.
If you drive on national highways, get ready to pay more from April 1. National Highways Authority of India has revised its toll rates by 5 to 7 per cent. The rates have been revised on the basis of Wholesale Price Index (WPI) and may vary from one toll plaza to another in the same region.
The businesses that transport goods worth over Rs 50,000 from one state to another will have to carry an electronic or e-way bill from April 1. An anti-evasion measure that would help boost tax collections by clamping down on trade that currently happens on cash basis, the e-way bill provision of the Goods and Services Tax (GST) was introduced on February 1.