Employed taxpayers will have significant relief from standard deductions! In the budget, the standard deduction cap could be raised to ₹75,000

Employed taxpayers will have significant relief from standard deductions! In the budget, the standard deduction cap could be raised to ₹75,000

Employed taxpayers will have significant relief from standard deductions! In the budget, the standard deduction cap could be raised to ₹75,000

Budget 2024: Even before the 2019 Lok Sabha elections, the Modi administration has doubled the maximum of standard deduction from Rs 40,000 to Rs 50,000 in the interim budget.

Union Budget 2024: In the interim budget to be presented in the Parliament before the Loksabha Elections 2024 to be conducted after three months, the Modi administration is proposing to offer respite from inflation to salaried and retirees. In terms of tax exemption, it may provide a substantial gift. In the interim budget that will be unveiled on February 1, 2023, Finance Minister Nirmala Sitharaman may raise the Standard Deduction cap from the existing Rs 50,000 to Rs 75,000.

Standard deduction has advantages in both tax systems!

Additionally, the standard deduction may be raised so that taxpayers who want to use the new income tax system in addition to the old one can profit from it. The Finance Minister had said that retirees and salaried individuals who choose the new tax system will get the advantage of standard deduction in the budget that was presented on February 1, 2023. The budget that was offered for the 2018–19 fiscal year included a standard deduction. Prior to the 2017–18 fiscal year, taxpayers were eligible for tax exemptions if they paid Rs. 15,000 in medical costs and Rs. 19,200 on transportation expenses every year. Nevertheless, taxpayers have to turn in the bill in order to get a tax exemption on this expense. However, the standard deduction was immediately introduced in the 2018 budget proposal in place of these two measures, relieving taxpayers of the burden of paperwork submission.

Getting ready for the standard deduction to rise!

Pensioners and members of the salaried class were eligible for a tax exemption and standard deduction of up to Rs 40,000; no paperwork was required. However, the Modi administration raised the cap on the amount that may be claimed as a standard deduction from Rs 40,000 to Rs 50,000 in the interim budget that was published before to the 2019 Lok Sabha elections. The Modi administration may now raise the standard deduction cap from Rs 50,000 to Rs 75,000 in the interim budget that will be presented before to the elections.

Getting ready to seize an electoral advantage

The interim budget, rather than the final one, will be presented by the finance minister on February 1, 2024. It is customary for the government to make no significant decisions on the granting of tax exemptions in the interim budget. However, the government can raise the standard deduction cap to help the common people escape the nation's crippling inflation and benefit the Modi administration politically in the Lok Sabha elections by allowing taxpayers to choose between the two tax regimes.