The Union Finance Minister ( FM ) Nirmala Sitharaman presented the full-budget 2024 today before the parliament at 11 am. In regard to Personal Income Tax Rates, the FM announced the proposal to increase the standard deduction under the Income Tax Act, 1961 for salaried employees from ₹50,000/- to ₹75,000/-.
The standard deduction for salaried employees under the Income Tax Act in India provides a fixed amount that can be deducted from the gross salary income, reducing the taxable income and consequently the tax liability.
As per the current provisions, the standard deduction for salaried employees is ₹50,000 per financial year. This means that a salaried individual can reduce their taxable salary income by ₹50,000. The standard deduction is available to all salaried employees, irrespective of the amount of their salary.
The standard deduction simplifies the process of tax calculation for salaried employees by providing a straightforward deduction from the gross salary income. By reducing the taxable salary income, the standard deduction helps in lowering the overall tax liability for salaried individuals.
Unlike other deductions and exemptions which may require supporting documents, the standard deduction does not require any proof or documentation. It is automatically considered while computing the taxable income.
The standard deduction is automatically applicable to salaried employees and does not require any specific claim while filing the income tax return.
The increase of standard deduction from ₹50,000 for salaried employees will impact more. The provision aims to provide relief to salaried individuals by lowering their tax burden and ensuring a more simplified tax filing process. The proposed change will provide relief to about four crore salaried individuals.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
