Calculate Your Income Tax Post Budget 2018

Income Tax post Budget 2018 won't be much different as no major changes have been introduced in the personal income tax except hike in education cess from 3% to 4% now and a standard deduction of Rs 40,000 per annum for Transport and Medical Reimbursements. Let us see these closely:

How 4% Education Cess will Impact Your Income Tax Post Budget 2018

Considering a 1% hike in education cess that is levied on the payable Income Tax on all tax payer categories, this is how it's going to impact common man (less than 60 years old):

Income Tax Slab Income Tax Rate & 4% Cess

Rs 2,50,000 Nil

Rs 2,50,001 - Rs 5,00,000 5% of Total Income above Rs 2.5Lakh + 4% Cess

Rs 5,00,001 - Rs 10,00,000 Rs 12,500 + 20% of Total Income above Rs 5Lakh + 4% Cess

Rs 10,00,000< Rs 1,12,500 + 30% of Total Income above Rs 10Lakh + 4% Cess

Let's assume your net taxable income is Rs 5 Lakh, then your tax liability will stand at Rs 13,000 and the increase in your income tax post budget 2018 is a measly Rs 125. However, it increases as you move up in the Income Tax Slabs. For example, assuming your net taxable income at Rs 10 Lakh, your tax liability will be Rs 1,17,000 including Rs 1,125 increase due to increased education cess. Moving up to the next slab, let’s take your net taxable income at Rs 15Lakh, your income tax liability will come out to be Rs 2,73,000 including an additional Rs 2,625 due to hiked education cess.

How Standard Deduction of Rs 40,000 per annum will Impact Your Income Tax Post Budget 2018

The standard deduction of Rs 40,000 per annum is in lieu of current medical allowance of Rs 15,000 and transport allowance of ₹19,200. Therefore, the common man gets exempted for additional Rs 5,800 on taxable income out of this barter. Thereby, the net saving on tax sums up to Rs 1,740, irrespective of which income tax slab you fall in.

Calculate Your Income Tax Post Budget 2018 by Using out Income Tax Calculator below:

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