Budget 2024:Â As the upcoming Union is approaching, people are expecting many big reliefs from the government. Many speculations are being made about the benefits to be announced by the Finance Minister for taxpayers.
Budget 2024:Â As the upcoming Union is approaching, people are expecting many big reliefs from the government. Many speculations are being made about the benefits to be announced by the Finance Minister for taxpayers. Many people are also discussing the increase in the standard deduction limit this time. The standard deduction of Rs 40,000 per year for the salaried class was reintroduced in Budget 2018, which will replace the earlier two deductions – travel allowance (Rs 19,200) and medical allowance (Rs 15,000) per year.
The standard deduction limit was increased to Rs 50,000 in the interim budget of 2019. However, there has been a persistent demand to increase this limit, as the combined total of the replaced deductions was Rs 34,200. The current limit of Rs 50,000 provides only marginal additional savings to taxpayers. Experts believe that in the upcoming budget, the Finance Minister may consider increasing the standard deduction to Rs 1 lakh per annum.
What is Standard Deduction
Standard deduction is a flat deduction available to salaried individuals. Employees are not required to submit any proof or document to the employer or the IT department to claim this deduction. Standard deduction up to Rs 50,000 per annum is allowed while computing the chargeable income under the salary head.
This deduction is available to all employees, whether in the private or government sector, irrespective of their salary. Till FY 2022-23, standard deduction was available only under the old system. However, from FY 2023-24, salaried taxpayers are also eligible for a standard deduction of Rs 50,000 under the new tax regime.
