Don't forget these changes while filing tax returns this year
Soon, it will be time to file your tax returns, the initial deadline for which would be July 31, 2018. As a taxpayer, it is necessary for you to keep abreast of the latest amendments to enable a salaried individual to compute taxes and file individual tax returns.
The applicable slab rate with respect to an individual having taxable income between Rs 2.5 lakh to Rs 5 lakh has been reduced from 10% to 5%. However, there has been no change in the tax rates for other slabs.
Earlier, an individual having taxable income up to Rs 5 lakh was entitled to a tax rebate. Now, this limit has been
reduced to Rs 3.5 lakh. Also, the tax rebate has been reduced from Rs 5,000 to Rs 2,500.Where an individual has taxable income of more than Rs 50 lakh but not exceeding Rs 1 crore, a surcharge of 10% is also applicable. Further surcharge of 15% continues for individuals having an income of more than Rs 1 crore.
Until AY 2017-2018, there was no restriction on the setting off of losses on the rented property or a deemed to be let-out property (arising on account of claiming interest payable on loan taken) against other income arising in the same financial year. Now with effect from AY 2018-2019, such losses can be set off only up to Rs 200,000 against other income. Any excess loss can be carried forward for set-off against income from house property over the following eight tax years.
For an individual having long-term capital gains arising from the sale of property, there is a change in the base year for indexation purpose from April 1, 1981 to April 1, 2001. Accordingly, the government has notified new cost inflation indexes. In the case of sale of immovable property, there has been a relaxation in the holding period from 3 years to 2 years, to be considered as long-term capital gains.
Further, in case an individual misses filing his income tax returns by the due date, a fee of Rs 5,000 will be levied if the return is filed on or before 31 December 2018; Rs 10,000 will be levied for returns filed after December 31, 2018. However, if the total income does not exceed Rs 5 Lakh, a fee of Rs 1,000 will be levied.