Clueless on How Your Income Tax has changed in 9 Years? Know More

Jun 11, 2018 | 1 year ago | Read Time: 2 minutes | By iKnowledge Team

The rise in consumer prices has soared significantly in the last 9 years. Take food for example. In 2009, you could buy milk at Rs. 22 a litre, cut to 2018, you now shell out anywhere between Rs. 50 – Rs. 65 a litre. With the rise in prices, the government made some changes in income tax laws for the advantage of common man.

Let’s consider how some of these income tax benefits can improve your investment opportunities: Tax-free income limit

Tax-free income limit means you can earn a specific income in a year without paying tax. In 2009, the tax-free income limit was Rs 1.9 lakh for women below 65 years and Rs 1.6 lakh for other assesses below 65 years. Also, women above 65 years of age could earn up to Rs 2.4 lakh a year without paying tax.

Today, you can earn up to Rs 2.5 lakh exempt from tax. People between the ages of 60 and 80 need not pay any income tax on earnings up to Rs. 3 lakh in a financial year. Also, a person above 80 years of age can earn tax-free income up to Rs. 5 lakh.

Medical benefits

Not just food and consumables, but cost of medication too saw an exponential rise since 2009. But with the recent changes in income tax laws, you can now claim tax benefits on certain medical expenses incurred in a financial year. In 2009-10, the tax limit on insurance premiums was Rs. 15,000,  which  now has been hiked to Rs 25,000. From April 1, 2018, you are now able to save more on tax, on medical insurance premiums for self, spouse, and children.

Make use of the limit hikes to protect your family against rising medical expenses. Now is the time to increase your medical insurance cover to prevent unforeseen and future costs.

Section 80C

Under Section 80C, you could save tax only upto Rs. 1 lakh in a financial year by making certain investments, such as life insurance policies. This limit has now been raised to Rs. 1.5 lakh. So, you can now invest the additional Rs. 50,000 in an asset that can create wealth and also offer you protection.

LTCG Tax and ULIPs

The budget 2018 introduced the Long Term Capital Gains (LTCG) tax on equity assets including equity shares and mutual funds.  A LTCG tax rate of 10% applies on long-term gains exceeding Rs. 1 lakh in a financial. However, the LTCG tax does not apply on a Unit Linked Insurance Plan (ULIP). Thus you can earn market linked returns without paying any tax. Under Section 80C, you can claim tax benefit up to Rs 1.5 lakh in a financial year for investing in a ULIP. Thus, it is a tax friendly investment option. Aegon Life offers a ULIP known as the iMaximize Plan. The premium paid can be claimed for tax benefits under Section 80C. iMaximize ULIP not only offers investment benefits but also risk cover. You can choose from six unit-linked funds depending on your objectives. Besides, your family is not left to fate in the event of an unfortunate incident.

Conclusion

Rising costs are likely to continue but they need not dampen your spirits. Look at the numerous income tax benefits you can avail from government measures. Use an income tax calculator as your best ally in comparing various investment opportunities. By investing in the right instrument, you can safeguard your family’s future against inflation.

Advt. no.: IA/May 2018/4030


Calculate premium for your Term Plan

GENDER
Date of Birth
DO YOU CONSUME TOBACCO?
Annual Income
Sum Assured
Select Cover Upto Age
Full Name
Mobile
Email ID
Your Monthly Premium for Aegon Life iTerm Insurance Plan

MOST READ

  • Jun 11, 2018
  • |
  • Read Time: 2 minutes

Section 80C, 80CCC & 80CCD Tax Deductions Explained

  • Jun 11, 2018
  • |
  • Read Time: 2 minutes

Tax Structure in India, Explained

RELATED ARTICLES


tax savings
  • Feb 18, 2019

EEE, ETE & EET Investments: Tax Saving Guide

  • Read Time: 4 minutes

GST & Tax
  • Feb 15, 2019

Relation Between High Fuel Prices & Indirect Taxes

  • Read Time: 3 minutes

  • Feb 01, 2019

Interim Budget 2019 and Vote on Account

  • Read Time: 6 minutes

  • Jan 24, 2019

Income tax act 1961

  • Read Time: 4 minutes

  • Jan 23, 2019

Income Tax E-Filing in India

  • Read Time: 3 minutes