The maximum deduction available under this section is Rs 25,000 and for senior citizens it is Rs 50,000.
Taxpayers can avail standard deduction without submitting any documents or investment proof.
As announced in the Union Budget 2023, the benefit of standard deduction for income tax payers has been extended in the new regime. Salaried individuals, pensioners and family pensioners can now avail standard deduction under the new regime.
Many of you would be aware of the various deductions provided under Section 80C, 80D, 80DDB and other provisions of the Income Tax Act. But, all taxpayers can avail standard deduction even without any investment.
The most common way of reducing your taxable income is by claiming the deduction provided under section 80C. It allows a deduction of up to Rs 1.5 lakh for investments made in various instruments such as Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Pension System (NPS), tax-saving fixed deposit (FD) and others. gives. The second most common way to reduce your taxable income is through section 80D. This section allows deduction on health insurance premium paid for self, spouse, children and parents. The maximum deduction available under this section is Rs 25,000 and for senior citizens it is Rs 50,000.
Under section 16 of the Income Tax Act 1961, every salaried person can avail a standard deduction on his taxable income. You do not need to submit any documents or investment proof to claim it. If someone is a pensioner, then he can also take advantage of this standard deduction. For this, you do not need to buy insurance or show any proof of investment.
The government keeps changing the standard deduction from time to time keeping in mind the inflation. Currently, taxpayers can get standard deduction of up to Rs 50,000. This means you can save up to Rs 50,000 without doing anything. Its biggest advantage is for those salaried individuals who fall in the taxable income slab because of the margin of just Rs 50,000. The standard deduction reduces your taxable income by Rs 50,000 and, in turn, reduces your tax liability.
Earlier the benefit of standard deduction was limited only to those who opted for the old tax regime. However, after the Union Budget 2023, this benefit has also been extended to those opting for the new tax regime. Whichever tax regime you choose, you are entitled to claim standard deduction of Rs 50,000. In the new tax system, the tax exemption limit has also been increased to Rs 3 lakh.
Please tell that the last date for filing Income Tax Return (ITR) is 31 July.
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