The Union Budget 2018, declared on February 1, 2018, had more than a few good news for investors. This may be discussed in the light of the following key highlights:
- There are no changes in income tax deduction for the salaried class. However, under transport and medical reimbursement, a deduction of Rs 40,000 has been provided for the salaried class and pensioners
- For senior citizens, Tax Deducted at Source (TDS) exemptions have been increased to Rs 50,000 on bank deposits.
- For senior citizens, Fixed Deposits and post office deposits are also applicable for tax exemption till Rs 50,000. 80D benefit has been extended to Rs 50,000 and 80DDB benefit from Rs 60,000 to Rs 1,00,000.
- For senior citizens, deduction under health insurance premium has been increased to Rs 50,000 and up to Rs 1,00,000 in case of critical illness.
- Long-term capital gains (LTCG) exceeding Rs 1,00,000 will be taxed at 10 per cent without indexation benefit.
- Equity Oriented Mutual Funds will be subjected to a dividend distribution tax of 10 per cent at par with the new LTCG of 10 per cent.
- Proposed to extend Pradhan Mantri Vaya Vandana Yojana (PMVVY) up to March, 2020. Current investment limit is proposed to be increased to Rs 15 lakhs from the existing limit of Rs 7.5 lakhs per senior citizen.
- Standard deduction of Rs 40,000 for pensioners.
- The contribution of Women employees to the Employees Provident Fund (EPF) was reduced from 12 per cent to 8 per cent.
- Government has agreed to provide 12 per cent contribution for new employees coming under the ambit of EPFO.
Because of this year’s budget, Fixed Deposits (FD) have emerged as a popular option for investors, because of their stability and high returns. As FDs are unaffected by market forces, they offer a steady rate of return and the risks of losing principal are lower than any other investment option.
In the Budget 2018-19, the finance minister announced TDS exemptions for senior citizen, under section 80TTB. With this exciting new update, senior citizens can now avail a deduction of up to Rs 50,000, as opposed to the previous limit of Rs 10,000 on interests earned from FDs.
Company fixed deposits are also emerging as one of the best options for investments, as investors are now turning towards company FDs for comparatively better interest rates.
Bajaj Finance fixed deposits offer higher interest rates to senior citizens. They also offer a suite of attractive benefits that make them one of the best investment options for individuals seeking stability and security along with high returns.