Standard deduction of INR 40,000 re-introduced
In the Union Budget 2018 the following benefits are given to the Salaried Individuals and details as follows.
Standard deduction of INR 40,000 re-introduced by withdrawing medical allowance and conveyance allowance.
Rs.30, 000/- relief was given to Salaried individuals till FY 2004-2005 for Standard deduction and it was abolished in the 2005 budget. Now the Finance Minister has Reintroduced Standard Deduction at Rs.40,000/- per year for Salaried individuals.
However the benefit of Transport allowance of Rs.19,200 and Medical Reimbursement of Rs.15,000/- under section 17(2) are being withdrawn. Thus net benefit to salaries class only Rs.5800/-
Apart from the above one more change has been made in the tax calculation i.e. the Education cess is revised from 3% to 4% and tax payers have to pay 1% extra education cess.