Last Update: February 08, 2023, 11:17 IST
The Finance Minister was only providing a hypothetical scenario to illustrate the possible implications of the inclusion of standard deduction provision under the new tax regime.
Salaried taxpayers having income up to Rs 50,000 will not be required to pay any tax for the presence of standard deduction of Rs 50,000 in the new regime.
Finance Minister Nirmala Sitharaman in her union budget 2023 The speech suggested that the benefit of standard deduction under the new tax regime should be extended to the salaried class, including retired people, family pensioners. Since the announcement, there has been a lot of uncertainty among taxpayers about whether the standard deduction provisions of the new tax regime will be applicable to all salaried individuals. If you’re still unclear, keep reading.
The finance minister’s speech had said that every salaried individual earning more than Rs 15.5 lakh would get a benefit of Rs 52,500, leading to uncertainty about the applicability of the new standard deduction provision. But what about those who earn less money?
The Finance Minister was only providing a hypothetical scenario to illustrate the possible implications of the inclusion of standard deduction provision under the new tax regime. However, tax professionals and even the Central Board of Direct Taxes (CBDT) have recently clarified that all salaried people and pensioners will be eligible for the standard deduction offered by the new regime.
In a post-Budget statement, CBDT Chairman Nitin Gupta informed news agency PTI that under the new system, standard deduction is now available to all salaried taxpayers. According to Gupta, “There are about 3.5 crore salaried taxpayers in India, and if they opt for the new regime, then every salaried taxpayer will be at par with the previous regime as standard deduction has been provided in the new regime…so there is parity in terms of has been established.”
Salaried taxpayers having income up to Rs 50,000 will not be required to pay any tax for the presence of standard deduction of Rs 50,000 in the new regime. “The benefit is filtered for each taxpayer category… Given that the standard deduction will be accessible to salaried taxpayers under the new system, an employee whose annual salary is Rs. 7.50 lakhs would not need to pay virtually any tax.
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