Finance Minister Arun Jaitley is bringing back standard reduction of Rs 40,000 for the salaried employee in lieu of transport allowance and medical reimbursement for the middle class by stating the standard deduction would benefit 2.5 crore people, Jaitley said there would be no further changes to personal tax slabs. He said this would cost the exchequer Rs 8,000 crore.
Meanwhile Alok Agrawal, Senior Director, Deloitte India said the ‘Standard deduction of Rs 40,000 a year for salaried individuals seems to be a very nominal benefit for medical expense reimbursement of 15,000 per annum and the transport allowance exemption of Rs 1,600 per month’.
Presently there
is no tax for those earning Rs 2.5 lakhs, 20% for those in the bracket of Rs 5
lakh to Rs 10 lakh, and 30% for Rs 10 lakh and above salary. Meanwhile for the
senior citizen, up to 60 years, there is no tax till Rs 3 lakh, 20% on income
between Rs 3 to Rs 5 lakh, and 30% for Rs 10 lakh and above. Furthermore for
the ‘super senior citizen aged above 80 years, the tax slabs are nil up to Rs 5
lakhs, 20% for Rs 5 lakh to Rs 10 lakh, and 30% above Rs 10 lakh.
