Standard Deduction was introduced in 1974, which was later discontinued. Union Budget 2018 reintroduced it and currently it is available for salaried individuals and pensioners. This deduction reduces the taxable income of the individual and hence his tax liability comes down.
Income Tax: If you file income tax return, keep one important thing in mind. Actually, while filing ITR, take care of Standard Deduction. Standard deduction is available to individuals and pensioners. Standard deduction is a fixed amount that is allowed as a deduction from the taxable income of an individual. It helps in reducing the taxable income of individuals and provides relief from tax liability.
Standard Deduction
Standard Deduction was introduced in India in 1974, which was later discontinued. Union Budget 2018 reintroduced it and currently it is available for salaried individuals and pensioners. This deduction reduces the taxable income of the individual and hence his tax liability comes down. Standard deduction was applicable only for those individuals who opt for the old tax regime. However, from the current financial year (FY 2023-24) the benefit is given to those individuals who opt for the new tax regime.
Income Tax Standard Deduction FY 2023-24
The Standard Deduction for salaried individuals for the FY 2023-2024 is Rs 50,000. This is a flat deduction which can be claimed irrespective of the actual expenses incurred on transport allowance and medical allowance. The Standard Deduction is available to all salaried individuals, including those employed by the government, private companies, or non-profit organizations.
Taxable Income
Standard Deduction is a tax benefit that can help you reduce your taxable income. For example, if your taxable income is Rs 100,000 and you claim standard deduction of Rs 50,000, your taxable income will be reduced by Rs 50,000. This would result in a tax saving of Rs 12,500 (assuming you are in the 25% tax bracket).
Who can claim standard deduction of Rs 50,000?
Individuals receiving salary or pension from government organization, private company or any other employer can claim standard deduction of Rs.50000.
Who is not eligible for standard deduction?
Standard deduction of Rs.50,000 or the amount of salary, whichever is less, is available to all salaried individuals and pensioners. Self-employed individuals are not eligible for standard deduction.
How to claim standard deduction?
To claim the standard deduction, you need to file your Income Tax Return (ITR) with the Income Tax Department. You can file your ITR online or offline. When you file your ITR, you will need to enter the amount of Standard Deduction that you are claiming. Standard deduction is a valuable tax benefit that can help reduce your taxable income. If you are a salaried individual, you should consider claiming standard deduction while filing your income tax return.
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