Let us tell you that this time standard deduction has also been included in the new tax system. That is, whether the tax regime is new or old, all taxpayers can take advantage of tax rebate of 50 thousand.
New Delhi. If you are also a taxpayer, then this news is very useful for you. As everyone knows, this time the government had given a big relief to the taxpayers in the budget. The government had announced that those earning less than 7 lakhs will not have to pay any income tax. However, this benefit will be available only to those opting for the new tax regime. The Finance Minister has raised the income tax exemption limit to Rs 7 lakh in the new tax regime, which was earlier Rs 5 lakh. While under the old tax regime, income up to Rs 2.5 lakh was tax free.
However, in the old tax regime, there is a provision for Standard Deduction and many exemptions in other items. These benefits were not given in the new tax regime. But let us tell you that this time standard deduction has also been included in the new tax system. That is, whether the tax regime is new or old, all taxpayers can take advantage of tax rebate of 50 thousand.
Will get tax exemption of 50 thousand
Explain that a taxpayer can claim up to Rs 50,000 for standard deduction, while every salaried person with an income of Rs 15.5 lakh or more gets a benefit of Rs 52,500 as standard deduction. Under the new tax regime, the basic exemption limit has been increased to Rs 3 lakh.
What is standard deduction?
Standard deduction was introduced in the budget of the year 2018. Earlier its limit was Rs 40,000, which was increased to Rs 50,000 the next year. The purpose of starting this is to give more money to the employees by giving them tax exemption. Standard deduction is the deduction that is deducted from the income of the income tax payer and after that tax is calculated on the remaining income.
Salaried employees and pensioners are already getting the facility to avail tax exemption through standard deduction. Suppose the annual income of a person doing a job is Rs 8 lakh. In such a situation, if the benefit of standard deduction up to Rs 50,000 is available in the total package, then their tax will be calculated on Rs 7,50,000 instead of Rs 8 lakh.
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