Income Tax: For the financial year 2023-2024, the standard deduction for salaried individuals is Rs 50,000.
Income Tax Standard Deduction: The standard deduction is available to salaried individuals and pensioners. The standard deduction is a fixed amount that is allowed as a deduction from an individual’s taxable income. It helps in reducing the taxable income of individuals and provides relief from tax liability.
In India, the standard deduction was introduced in 1974, which was later discontinued. The Union Budget 2018 re-introduced it and currently it is available to salaried individuals and pensioners.
Read More: Income Tax AIS App: Step-By-Step Guide To Know TDS, TCS And Other Details On Mobile
Standard Deduction Benefits
This deduction reduces the taxable income of the individual and therefore reduces their tax liability. The standard deduction was applicable only to individuals who opt for the old tax regime, however, from the current financial year (FY 2023-24) the benefits are extended to the individuals who opt for the new tax regime as well, which was introduced in 2020.
Income Tax Standard Deduction FY 2023-24
For the financial year 2023-2024, the standard deduction for salaried individuals is Rs 50,000. This is a flat deduction that can be claimed irrespective of the actual expenses incurred on transport allowance and medical allowance. The standard deduction is available to all salaried individuals, including those who are employed by government, private companies, or non-profit organisations.
Read More: Income Tax Return Filing: Avoid penalty, scrutiny and notice by following these steps
The standard deduction is a tax benefit that can help to reduce your taxable income. For example, if you have a taxable income of Rs 100,000 and you claim the standard deduction of Rs 50,000, your taxable income will be reduced to Rs 50,000. This will result in a tax saving of Rs 12,500 (assuming you are in the 25% tax bracket).
Who Can Claim Standard Deduction Of Rs 50,000?
Standard deduction of Rs 50,000 can be claimed by individuals who receive a salary or pension from a government organisation, a private company, or any other employer.
It is important to note that the standard deduction was claimed by those who opt for the old tax regime, however, from financial year 2023-23, this deduction is also available under the new tax regime.
Read More: ITR-3 Online Form Is Live Now! Know Who Can Use It For Filing Income Tax Return FY 2022-23
Who Is Not Eligible For Standard Deduction?
The standard deduction of Rs 50,000 or the amount of the salary whichever is less, is available to all salaried individuals and pensioners. Self-employed individuals are not eligible for the standard deduction.
How To Claim Standard Deduction?
To claim the standard deduction, you will need to file your income tax return (ITR) with the Income Tax Department. You can file your ITR online or offline. When you file your ITR, you will need to enter the amount of standard deduction that you are claiming.
The standard deduction is a valuable tax benefit that can help to reduce your taxable income. If you are a salaried individual, you should consider claiming the standard deduction when you file your income tax return.
