Standard Deduction to Salaried Taxpayer in Budget 2018 With Automated Income Tax Master of Form 16 Part B for F.Y.2018-19
This post is regarding the quality Deduction For the Salaried individuals. This Deduction was introduced within the budget of 2018. owing to this deduction, the folks that earn a monthly remuneration will claim a set deduction of Rs. forty thousand from their total financial gain. It leads to a reduction of liabilities. owing to this deduction, the tax will scale back up to Rs. 12,000.
The standard deduction may be thanks to providing further tax break solely to the salaried individuals. it’s a set deduction of Rs. 40,000 regardless of financial gain, expense or investment. To avail this deduction you’re not needed to submit any receipt or investment proofs.
A worker gets a typical deduction for the unaccounted expense joined to the work. you’d agree that there square measure several job-related expenses that you can’t manufacture the receipt. whereas a businessperson has many ways to assert his expenses. therefore the government has created this provision to relinquish relief to the worker.
Standard Deduction Instead of Medical And Conveyance Allowances
For the sake of parity, the government has introduced the standard deduction of Rs. 40,000. But along with this deduction, the government has ended the Conveyance and Medical Allowance. You may know that for the medical reimbursements, you have to collect the medical bills.
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Until FY 2017-18, you could claim the medical allowance of up to Rs. 15,000 and Rs. 19,200 per year. Hence, these allowances had entitled you the tax exemption on Rs. 34,200. This exemption is now replaced with the standard deduction of Rs. 40,000. This deduction is applicable from FY 2018-19.
Income Tax Calculation and Standard Deduction
From the FY 2018-19, each worker will claim the quality deduction of Rs. 40,000. I mean that you simply should deduct this quantity from the non-exempt financial gain. when this deduction and alternatively applicable deduction, you ought to calculate the revenue enhancement on the premise of revenue enhancement block. therefore currently your revenue enhancement calculation would undergo the subsequent steps.
The government workers should embrace this deduction whereas e-filing revenue enhancement comes back. As several of them weren’t obtaining conveyance and medical allowances. therefore this deduction would profit them most.
However, for those workers UN agency are availing the total medical allowance and Conveyance Allowance, the profit is tiny. For them, the non-exempt earnings would cut back by Rs 5,800 as a result of the quality deduction.
|Particulars||Until FY 2017-18||From FY 2018-19|
|Gross Salary (in Rs.)||4,00, 000||4,00,000|
|(-) Transport Allowance||19,200||Not Applicable|
|(-) Medical Allowance||15,000||Not Applicable|
|(-) Standard Deduction||Not Applicable||40,000|
Standard Deduction and e-filing
Standard Deduction on Pension
From the Assessment year 2019-20 (FY 2018-19), there would be little amendment within the ITR kind. within the ITR-1, there would be a customary deduction of Rs. 40,000 for everybody. This deduction would be inbuilt within the kind. Hence, your gross remuneration would be reduced by Rs. 40,000. you’d see this row. it might not be editable. Therefore, if any leader failed to consider this deduction, the revenue enhancement come would offer the refund.
However, for the opposite ITR forms, this deduction would be applied if you decide on yourself as a salaried individual.
There was a confusion that whether this standard deduction of ₹40,000 would be applicable to pensioners as well. As they get pension instead of the salary. So, later the government has clarified that for tax purposes the pension is considered as the salary hence the pensioners would also enjoy the benefit of standard deductions.
Thus, the pensioners should be happier as they were not getting any allowance earlier. This standard deduction would give them the full benefit.
In this post, I have told you about the standard deduction which is an important component for income tax calculation. Besides this, you should also know about the income tax rebate, surcharge and cess. These also play a crucial role in determining your tax liability.