The Fund Priest, in Spending plan 2018, has not gotten the much-expected changes in duty sections. Nor has he contacted Area 80C with respect to raising the points of confinement for the individual citizens. In any case, the salaried class still have something to celebrate about after the financial plan.
He has proposed to reintroduce the 'Standard Derivation' of Rs 40,000. What is a standard finding? It is a settled measure of conclusion – for this situation, a measure of Rs 40,000 which can be decreased by salaried citizens, from their gross compensation. Strangely, the arrangement of Standard Conclusion was before accessible however was annulled in the Fund Demonstration 2005. It is additionally suggested that this conclusion would supplant the current transport recompense of Rs 1600 every month and medicinal remittance of Rs 15,000 for each annum. They are generally deducted from the gross compensation and guaranteed as an exclusion. The administration has proposed imperative revisions to Segment 17(2)(viii) of the Salary assess Act, 1961.
Resultantly, if the standard conclusion of Rs 40,000 replaces therapeutic remittance of Rs 15,000 and transport stipend of Rs 1600 every month i.e. 19,200 for every annum, the compelling extra advantage because of the standard finding would be an extra salary exclusion of Rs 5,800
Let us understand this with a small example:
Particulars | Until AY 2018-19 | From AY 2019-20 |
Gross Salary (in Rs.) | 5,00, 000 | 5,00,000 |
(-) Transport Allowance | 19,200 | Not Applicable |
(-) Medical Allowance | 15,000 | Not Applicable |
(-) Standard Deduction | Not Applicable | 40,000 |
Net Salary | 4,65,800 | 4,60,000 |
From the above, you may note that the taxable salary has come down on account of the standard deduction.
Download and prepare at a time 100 Employees Income Tax Form 16 Part B for the Financial Year 2018-19.
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Taxpayers Receiving Pension
In a recent clarification issued by the income tax department, if a taxpayer has received a pension from the former employer, it is taxable under the head ‘Salaries’. Therefore, the taxpayer shall be entitled to claim a standard deduction of Rs. 40,000 or the amount of pension, whichever is less.
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