Standard deduction of Rs. 40000/- for salaried employees for the AY 2019-20 is reintroduced in the Budget 2018-19 Proposals presented in Lok Sabha today
As per the speech of the Finance Minister, the standard deduction is being made available in lieu of transport and reimbursement of miscellaneous medical allowance.
Presently, as per Rule 2BBA, transport allowance granted to an employee for commuting from residence to office is exempt to the extent of Rs. 1600 per month. In other words, deduction of Rs. 19200/- p.a. has been taken back.
Thus the effective benefit of standard deduction would be only Rs. 20800/- to a salaried person getting transport allowance if Rs. 19200/- p.a.
However Transport allowance at enhanced rates of Rs. 3200/- per month shall continue to be available to differently abled persons. Also, other medical reimbursements benefits in case of hospitalisation shall continue.
In section 16 of the Income Tax Act, 1961 a sub-section (ia) has been introduced with effect from 1st day of April, 2019 (i.e. AY 2019-20) as under:
“(ia) a deduction of forty thousand rupees or the amount of the salary, whichever is less.”----------- Similar Posts: -----------