July 12, 2024
Standard deduction: Your key to tax relief
It is believed that in the forthcoming Union Budget 2024-25, the government raise the standard deduction threshold for salaried individuals from ₹50,000 to ₹1 lakh.
It is a fixed deduction from your gross salary. Taxpayers are not required to provide any proof or documents to the employer or IT department to claim this deduction.
What is standard deduction?
It was introduced in 1974, and later abolished in the year 2006-07. Budget 2018 brought back the standard deduction of ₹40,000, and Interim Budget 2019 increased it to ₹50,000.
When was it introduced?
Salaried individuals in both private and government sectors can claim this deduction. And it applies to individuals choosing either the old or new tax regime while filing their tax returns.
Who is it for?
Tax experts are suggesting this hike to enhance the purchasing power of lower and middle income earners and to promote parity between salaried individuals and those earning income from profession or business.
Why is an increase proposed?
It will provide an additional income benefit to the taxpayers, by lowering the taxable salary, hence reducing the overall tax liability.
How will it benefit the taxpayers?
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