New income tax rules from April 1: 10 things you need to know

The income tax rules are set for changes from April 1 and it's going to impact your salaries or investments. Here is a list of 10 things you need to know.

1. Standard deduction: The salaried class will enjoy a flat Rs 40,000 deduction on taxable income. The deductions are linked to the transport and medical allowances which will help taxpayers save upto Rs 5,800 every year.

2. Higher cess: The gain from standard deduction could be wiped out by higher cess. The cess on health and education will now attract four per cent of income tax, an increase of one per cent from last year.

3. Long-term capital gains tax: Capital gains from equity shares will now attract a new 10 per cent tax. This tax will be applicable if capital gains exceed Rs one lakh. However, gains till January 31 have been exempted from this tax.

4. Tax on equity mutual fund dividends: Ten per cent tax will be levied on dividend income from equity mutual funds.

5. Benefits on single premium health insurance policies: Those with policies covering more than a year will enjoy more deduction. Earlier, a person could claim deduction only up to Rs 25,000. From April 1, deduction will be allowed on a proportionate basis. The calculation is based on the number of years for which the cover is provided.

6. Tax benefit on NPS withdrawal:Tax-free withdrawal of National Pension Scheme (NPS) will be allowed for non-employee subscribers. Earlier, a contributing employee was allowed 40 per cent benefit on closure of account.Now this benefit will be extended to the non-employee contributers as well.

7. Interest income exemption (senior citizens): Senior citizens will enjoy higher returns from deposits in banks and post offices. The deduction on such income under section 80TTA is currently Rs 10,000. Under a new it section, deduction will be allowed up to Rs 50,000.

8. Higher TDS for senior citizens: Tax Deduction at Source (TDS) on interest income for senior citizens will be hiked to Rs 50,000. Earlier the threshold for deduction at source on interests was Rs 10,000.

9. Higher deduction under Section 80D: Senior citizens will enjoy increased deduction on health insurance premiums. The earlier limit of Rs 30,000 has been raised to Rs 50,000. Citizens with
parents above 60 years can claim an additional deduction of Rs 25,000.

10. Deduction under section 80DDB: Senior citizens will get more benefit for medical treatment of specified diseases. The deduction has been hiked by Rs 20,000 to Rs 1 lakh for very senior citizens.
The deduction limit has been raised by Rs 40,000 for senior citizens.