Budget 2018: Govt tweaks tax deductions and EPF norms
The government proposed 100 per cent deduction on revenue from Farmer Producer Companies, in the Union budget 2018. While deductions under section 80JJAA is extended to footwear industry, earlier, the criteria of a minimum period of 150 days employment was available only to the apparel industry.
Corporate tax reduced to 25 per cent for companies having turnover up to Rs. 250 crore. The government expects a revenue forgone of Rs. 7,000 crore for fiscal 2018-19.
For salaried individuals, even though the government has not changed the tax slab has expected by many, the Standard deduction of Rs. 40,000 in lieu of medical and transport expenses is allowed. This move would greatly benefit pensioners as earlier they did not enjoy any standard deduction or other allowances which is available to salaried employees.
For Charitable institutions (section 12AA), payment made above Rs. 10,000 in cash shall be disallowed for the income tax purposes.
The government has proposed to increase Education Cess and health cess from existing 3 to 4 per cent for all tax payers.
On the Employee Provident Fund front, government will contribute 12 per cent of wages of new employees to EPF for the next 3 years in all sectors. While to bring more women employees to the workforce, government has reduced their contribution to EPF from 12 to 8 per cent for the first three years.