Shri Jaitley said, “The Government had made many positive changes in the personal income-tax rate applicable to individuals in the last three years. Therefore, I do not propose to make any further change in the structure of the income tax rates for individuals. There is a general perception in the society that individual business persons have better income as compared to salaried class.”
The Finance Minister further said, “Apart from reducing paper work and compliance, this will help middle class employees even more in terms of reduction in their tax liability.”
This standard deduction has been given in place of Transportation Allowance ( Rs 19200/-) and Medical Reimbursement ( Rs 15000/-) total of Deduction withdrawal is Rs 34200=19200+15000.
Whereas New standard deduction given Rs 40000/-
It would net effect of Rs 5800 = 40000-34200. Increase in deduction.
This deduction is more beneficial to retired persons and persons who are not getting the benefits of medical reimbursement and transport allowance as they will get flat Rs 40000/- deduction.
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