The standard deduction U/s 16(1a) was reintroduced in the 2018 budget and amended in the 2019 budget, with the aim of replacing medical allowances and travel allowances for salaried employees. The standard deduction for salaried persons for 2012-2019 will take effect from 1st April 2019.
It is allowed to deduct every penny for standard deduction Rs. 50,000 / – from F.Y. 2019-20
What is the standard discount?
Earlier transport allowance and medical allowance were sanctioned for the employees so they have to submit the bill of expenditure 2012-201. The standard deduction for the financial year / u 16 (IA) is the replacement of transport allowance and medical allowance.
Standard deduction type
The standard exemption under the 2018 Income Tax has a certain amount of exemption Rs. 40,000 / – which may be deducted from the total salary of the taxpayers by taking their salary or pension income.
The amount of income from rent is also reduced by 30% and brought under standard discount.
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From the financial year, standard deduction Rs. 50,000 / – is sanctioned for 2019-2020. Note that in F.Y 2018-19 it is Rs. 40,000 / -.
Earlier, medical allowance of Rs. 4,000 / – for treatment. 15,000 / – per annum and transport allowance is substituted instead of the standard deduction of Rs. 19,200/- per annum. 40,000, effective additional benefit due to standard discount is exemption of additional income of Rs. 2,000. 5,800.
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FAQ on standard deduction for the F.Y.2020-21 as per U/s 115 BAC.
FAQ on standard deduction
Q&A of standard deduction’s for salaried employees
Q: Can I use both standard discounts and personal diduction?
A: Yes, after SD discount you can avail Section 80C, HRA and many more.
Q: What is the standard discount of rupee? 40,000 under Section 16 applies to a person whose sole source of income is interest from FD?
A: No, standard discounts are for salaried and pensioners only.
Q: What will be the standard discount of rupee? 40,000 income tax helpers in India?
Answer: Standard discount means Rs. 5,000 / – for replacement of medical and transport allowance of the employee. 34200. Thus no employee pays Rs. 5800/-
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