A few drops to a thirsty man – that is what the Union Budget 2018 appears to be from an individual’s perspective.
As Finance Minister Arun Jaitley began with a preamble on the tax collections from the salaried class, and the whole of India watched in anticipation, his announcement of a standard deduction of Rs 40,000 quickly translated into a mere whimper as it came accompanied with withdrawal of the medical reimbursement of Rs 15,000 per annum and the monthly transport allowance of Rs 1,600. Hence, effectively, the benefit dwindled to a mere Rs 5,800 per annum.
Add to that the increased 1 percent health cess, and the new 10 percent tax on long-term capital gains in excess of Rs 1 lakh, and we realise that he has actually taken away more than he has given.
That’s not all. The erstwhile LTCG exemption under Section 54EC, which was applicable for any long-term gain, is now restricted to LTCG from land and building. Hence, capital gains from other long-term assets will not be eligible for exemption upon investing the gains into specified infrastructure bonds.