Download Automated All in One TDS on Salary for Govt & Non-Govt Employees for F.Y.2018-19 & Ass Yr 2019-20 with Rs 40,000/- Standard Deduction from FY 2018-19

The Union Budget 2018-19, the Finance Minister has proposed to provide Rs. 40000/- Standard Deduction from salary income to all employees & pensioners.

As per the Tax rules that are applicable for FY 2018-19 (AY 2019-20) ;

  • A Salaried individual can claim annual Transport allowance (conveyance allowance) of up to Rs 19,200 (Rs 1,600/-pm) and up to Rs 38,400/- (Rs 3,200 pm) by differently-able persons.
  • The Salaried can also claim up to Rs 15,000 (Rs 1,250 pm) medical reimbursement. To claim this, you would have been submitting medical bills to your employer and getting the allowance benefit.
  • These allowances are part of Section 10 of the Income Tax Act.

With effective from FY 2018-19, a standard deduction of Rs 40,000/- in lieu of travel and medical allowances has been proposed for salaried employees and pensioners.

However, the transport allowance at enhanced rate (i.e., Rs 3,200/- pm) shall continue to be available to differently-able persons. Also, other medical reimbursement benefits in case of hospitalization etc., for all employees shall continue.

What is Standard Deduction? How to claim Rs. 40000/- Standard Deduction?

A Standard Deduction is nothing but a fixed amount of deduction. There are two types of Standard deductions that are now allowed in FY 2018-19 / AY 2019-20.

  • An amount of Rs 40,000/- which can be reduced by taxpayers receiving salary or pension income, from their gross salary. A similar provision of Standard Deduction from Salary Income was earlier available but was abolished in the Finance Act 2005 (new provision as per Budget 2018-19).
  • Standard Deduction @ 30% can be reduced from ‘Income from Rent receivables’ under the head ‘Income from House property‘(existing provision).

Thus suppose if a person has worked for few days (or) months and his salary was just Rs 40,000 in current financial year, then he/she will be entitled to a deduction equal to salary being the same amount.

If his salary is less, say Rs 30,000 the deduction shall be restricted to Rs 30,000. If salary exceeds amount of Rs 40,000, the deduction shall be restricted to Rs 40,000.

So, ideally your Form-16 will reflect a fixed deduction of Rs 40,000 in lieu of Conveyance and Medical allowances w.e.f AY 2019-20.

Click here to Download the Automated All in One for TDS on Salary for Govt & Non-Govt Employees for F.Y.2018-19 and Ass Year 2019-20 [ This Excel Utility can prepare at a time your Income Tax Computed Sheet + Individual Salary Structure for Govt & Non-Govt employees Salary Pattern + Individual Salary Statement + Automatic H.R.A. Calculation + Automated Arrears Relief Calculation with Form 10E from F.Y.2000-01 to F.Y.2018-19 + Automated Income Tax Form 16 Part A&B and Form 16 Part B for F.Y.2018-19]

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