Standard Deduction u/s 16(ia) first introduced in Budget from 2018, Advantage of Standard Deduction is just for Salaried Individuals. [ This Standard Deduction is not allowed to the New Tax Regime U/s 115 BAC for the F.Y.2020-21, who are opt in the New Tax Regime but who are opt in the Old Tax Regime they can get this benefits.]
Exemption from Income Tax u/s 16(ia) states that a tax payer having pay chargeable under the head 'Salaries' shall be allowed a deduction of Rs. 50,000/- or the amount of salary, whichever is less, for figuring his total pay. Presently all representatives will get a standard deduction of Rs. 50,000/- P.A.
Standard Deduction – First Introduced in Budget 2019
The Break Financial plan introduced on 1 February 2019 incorporated various tax benefits for the salaried and the working class. Among them, an additional amount of Rs. 10,000 to the Standard Deduction is an essential move. With the Standard Deduction being Rs 50,000/- now, it will help taxpayers monstrously to diminish their tax outgo
From the above, it is clear that the taxable salary has descended on account of the standard deduction.
Benefits of the taxpayers
In an ongoing clarification issued by the annual tax department, if a taxpayer has gotten a benefits from the former boss, it is taxable under the head 'Salaries'. However, the taxpayer can claim a standard deduction of Rs. 40,000/- or the amount of annuity, whichever is less. Increased to Rs 50,000 for F.Y 2019-2020(A.Y 2020-21) and on-wards Financial Year.
