Income Tax Changes In 5 Years: Key Things To Know

Finance Minister Arun Jaitley has announced a slew of changes in income tax rules in Union Budgets from 2014 to 2018. With general election due by May this year, the government will present an interim Budget on February 1. This year's Budget, the last before the general election due by May, will give the government the final chance to sway public perception. (Also read: Can you expect income tax changes in Budget? Here's what experts say)

Here are some key changes in income tax rules announced by the finance minister in the five annual budgets since 2014.

Budget 2018

• Hike in cess to 4% from 3%
• Introduction of standard deduction of Rs 40,000 for salaried individuals 
• For senior citizens: 
  • Exemption of interest income on bank/post office deposits increased to Rs 50,000 from Rs 10,000
  • Hike in deduction limit for health insurance premium/medical expenditure to Rs 50,000 from Rs 30,000 under section 80D of Income Tax Act

Budget 2017

• Reduction in income tax rate on income of Rs 2.5 lakh-5 lakh to 5% from 10%
• Rebate under Section 87A lowered to Rs 2,500 from Rs 5,000; no rebate on income above Rs 3.5 lakh
• Surcharge of 10% on income of Rs 50 lakh-Rs 1 crore
• Penalty up to Rs 10,000 on failing to file returns on time (not more than Rs 1,000 on income up to Rs 5 lakh)
• Abolition of deduction on investment in Rajiv Gandhi Equity Saving Scheme

Budget 2016

• Increase in surcharge to 15 per cent from 12 per cent total income over Rs 1 crore
• Tax rebate for individuals with income up to Rs 5 lakh raised to Rs 5,000 from Rs 2,000
• Additional deduction up to Rs 50,000 on interest payment for first-time home loan borrower (over and above Rs 2 lakh for home loan borrower)

Budget 2015

• Wealth tax abolished
• Surcharge on income above Rs 1 crore increased to 12% from 10%

Budget 2014

• Income tax exemption limit raised by Rs 50,000 to Rs 2.5 lakh (Rs 3 lakh for senior citizens)
• Exemption limit for investment in financial instruments under Section 80C of Income Tax Act
• Deduction limit on interest on loan for self-occupied house raised to Rs 2 lakh, from Rs 1.5 lakh