In India, the standard deduction is available to salaried individuals and pensioners. The standard deduction is a fixed amount that is allowed as a deduction from an individual’s taxable income. It helps in reducing the taxable income of individuals and provides relief from tax liability.
The standard deduction is a flat deduction allowed under Section 16 of the Income Tax Act, 1961.
In India, the standard deduction was introduced in 1974, which was later discontinued. The Union Budget 2018 re-introduced it and currently it is available to salaried individuals and pensioners.
This deduction reduces the taxable income of the individual and therefore reduces their tax liability. The standard deduction was applicable only to individuals who opt for the old tax regime, however, from the current financial year (FY 2023-24) the benefits are extended to the individuals who opt for the new tax regime as well, which was introduced in 2020.
What Is The Standard Deduction For FY 2022-23?
In India, the standard deduction of Rs 50,000 or the amount of the salary whichever is less, is available to all salaried individuals and pensioners. This deduction is available regardless of the amount of income earned by the individual.
Who Can Claim Standard Deduction Of Rs 50,000?
Standard deduction of Rs 50,000 can be claimed by individuals who receive a salary or pension from a government organisation, a private company, or any other employer.
It is important to note that the standard deduction was claimed by those who opt for the old tax regime, however, from financial year 2023-23, this deduction is also available under the new tax regime.
Who Is Not Eligible For Standard Deduction?
The standard deduction of Rs 50,000 or the amount of the salary whichever is less, is available to all salaried individuals and pensioners. Self-employed individuals are not eligible for the standard deduction.
You can claim the standard deduction while filing your income tax return (ITR).
Moreover, it is always advisable to consult a tax expert or refer to the official income tax website for any specific or updated information related to taxation laws and rules.
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