The government is considering increasing the limit of standard deduction under the new tax regime. Finance Minister Nirmala Sitharaman can announce this in the first budget of her third term. The Finance Ministry can make this announcement after consultations at different levels and internal evaluation of various departments of the government and the Prime Minister’s Office.
What is standard deduction?
Standard deduction is a fixed amount that taxpayers can deduct from their taxable income without having to provide proof of expenses. It reduces the taxable income and hence reduces the overall tax liability.
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Current proposals and past budget measures
Finance Minister Nirmala Sitharaman had proposed a standard deduction of Rs 50,000 for salaried and pensioners under the new tax regime in the budget for the last financial year. Increasing the limit of standard deduction can reduce the taxable income of all salaried taxpayers. The move is aimed at providing relief to people from rising expenses and financial challenges.
For the financial year ending March 31, 2024, the last date for individuals to file their income tax returns (ITR) is July 31, 2024. However, the process of filing ITR can be a bit daunting, especially for individual taxpayers who find it difficult to understand the various sections and things required to file their ITR.
