#Budget2018 Middle Class Hopes Dashed, No Change In Income Tax Slab, Hike In Cess

| February 1 , 2018 , 14:19 IST

Finance Minister Arun Jaitley on Thursday presented the Union Budget 2018, the last full budget of the present government. The budget had several key announcements.

While the Finance Minister delivered his budget speech the salaried class held its breath waiting for Arun Jaitley to announce relief in income tax.

However these hopes were short-lived as the Finance Minister announced that there would be no change in individual income tax.

The Minister however announced that there would however be a standard deduction of Rs 40,000 for salaried individuals.  

The reintroduction of standard deduction is aimed at providing for the expenses of an employee’s daily upkeep. It helps salaried taxpayer with reduced income tax liability and reduced paperwork. The standard deduction is extended without asking for any proof of expense or investment.

While standard deduction brings some relief, the hike in health and education cess and the introduction of Long Term Capital Gain Tax hits the common man where it hurts the most.

The government already imposes Securities Transaction Tax on transacting in shares, bonds, debentures, derivatives units, interest in securities and equity mutual funds. The Finance Minister announced to tax Long Term Capital Gains exceeding Rs 1 lakh at the rate of 10% without benefit of indexation. However gains purchases below 20% up to 31 January 2018 won't be taxed.

India becomes one of the few nations to have Securities Transaction Tax, Short Term Capital Gains Tax as well as Long Term Capital Gain Tax.