Budget 2024: Standard deduction raised to Rs. 75,000 under new tax regime. How will it benefit salaried class?

July 23, 2024

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July 23, 2024 0 comment

Jul 23, 2024 06:56 PM IST

Union Budget 2024: The standard deduction for family pensioners has also increased from ₹15,000 to ₹25,000.

While presenting the Union Budget for 2024-25 in the Lok Sabha, finance minister Nirmala Sitharaman announced an increase in the standard deduction for salaried employees from ₹50,000 to ₹75,000 under the new income tax regime for Fiscal Year 2025.

50,000 under the old regime (Unsplash) (Pics used for representation)” title=”Salaried taxpayers will continue to be eligible for a standard deduction of only ₹50,000 under the old regime (Unsplash) (Pics used for representation)”>

Salaried taxpayers will continue to be eligible for a standard deduction of only ₹50,000 under the old regime (Unsplash) (Pics used for representation)

However, there has been no change in the old tax regime regarding the standard deduction. Therefore, salaried taxpayers will continue to be eligible for a standard deduction of only ₹50,000 under the old regime.

The standard deduction for family pensioners has also increased from ₹15,000 to ₹25,000. This marks the first increase in the standard deduction limit in five years, with the previous adjustment occurring in the Interim Budget of 2019, when the limit was raised to ₹50,000, effective from April 1, 2019.

The standard deduction provision had been removed for several years before being reintroduced during the Budget announcement in 2018. This benefit is available to individuals with salary or pension income, which applies only to salaried employees and pensioners.

How do you claim a standard deduction?

The standard deduction is a direct reduction applied to salary and pension income, and no documentation is needed to claim it. It is automatically applied based on the salary or pension income reported in the income tax return. Therefore, it is essential to report the receipt of salary or pension income.

What is the purpose of ‘standard deduction’?

The standard deduction is typically subtracted from the gross salary and can be claimed by all salaried employees without any investment, regardless of their category.

According to ClearTax, the introduction of the standard deduction aims to:

– Simplify tax filing by minimising paperwork and allowing deductions without requiring proof of actual expenses.

– Provide tax relief to middle-class salaried individuals.

– Extend benefits to pensioners through the standard deduction.

When was standard deduction first introduced?

The standard deduction had been available earlier but was abolished by the Finance Act of 2005.

In Budget 2018, finance minister Arun Jaitley introduced a standard deduction of ₹40,000, benefiting the salaried class by replacing the transport allowance of ₹19,200 and medical reimbursement of ₹15,000 per annum.

In the interim budget of 2019, the standard deduction was increased by ₹10,000, raising it to ₹50,000, effective from April 1, 2019.

The recent adjustment in the Budget 2024-25 raised the standard deduction to ₹75,000 under the new tax regime, benefiting salaried individuals and pensioners by reducing their taxable income and lowering their tax liability.

Family pensioners will also benefit from a higher deduction of ₹25,000.

This standard deduction is available to individuals receiving salary or pension income, but according to the TOI, it does not apply to annuity payments from insurance companies, which are taxable under “Income from Other Sources.”

Copyright 2024 - All Rights Reserved - Janashakti.News

Union Budget 2024: The standard deduction for family pensioners has also increased from ₹15,000 to ₹25,000.

How do you claim a standard deduction?

What is the purpose of ‘standard deduction’?

When was standard deduction first introduced?

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Copyright 2024 - All Rights Reserved - Janashakti.News

Budget 2024: Standard deduction raised to Rs. 75,000 under new tax regime. How will it benefit salaried class?

Union Budget 2024: The standard deduction for family pensioners has also increased from ₹15,000 to ₹25,000.

How do you claim a standard deduction?

What is the purpose of ‘standard deduction’?

When was standard deduction first introduced?

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Budget 2024: How the changes in new tax regime will benefit the salaried, explained

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