ITR Filing | As India awaits Budget 2024, learn all about standard deduction and how it helps salaried individuals save tax
Some of the cases where standard deduction does not apply are during instances when the ITR is being filed for a period of less than one year, in case when a taxpayer has a dual status in a particular financial year etc.
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06:45 PM IST
After being withdrawn for many years, standard deduction was reinstated in the Union Budget 2018 for salaried taxpayers. So as it is the tax filing season and you may be gearing to file your taxes for the previous fiscal year 2024, here is a quick lowdown on how standard deduction helps salaried class and pensioners save taxes.
Importantly, benefits that shall then be accrued as a result of claiming standard deduction would solely depend on the tax bracket in which the taxpayer falls.
What is standard deduction?
The Income Tax Act that offers numerous ways of claiming deductions and rebates on one’s income allows standard deduction to salaried class and pensioners. This deduction is available to them by default irrespective of any investment or money spent.
Typically, it is a flat deduction allowed on the total salary of a salaried class taxpayer in a particular financial year.
For the financial year 2023-24, the standard deduction allowed is Rs 50,000.
How does the standard deduction help salaried class and pensioners save taxes?
Salaried class and pensioners other than business owners are allowed to claim standard deduction and the provision helps them to reduce their taxable income by a standard amount i.e. Rs 50,000 currently. This deduction renders the tax filing process simpler and often lowers the tax liability of the concerned taxpayer.
Standard deduction under new tax regime
While the new tax regime does not offer the otherwise common deductions including those under Section 80C, deductions against 80D etc, standard deduction is an exception being available under both the old and new tax regime.
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