Budget 2024: Standard Deduction For Salaried Individuals May Jump To Rs 1 Lakh

The finance ministry is reportedly weighing options to increase the standard deductions limit for salaried individuals. Finance Minister Nirmala Sitharaman is likely to declare a surge in the threshold limit of the standard deduction for salaries individuals presently stood at Rs 50,000 in the upcoming Union Budget 2024-25.

According to a report published in Moneycontrol, Sitharaman may consider raising the tax exemption limit to Rs 1 lakh offering the much-needed relief to taxpayers.

In budget 2018, standard deduction of Rs 40,000/year was reintroduced thus replacing the previous deductions namely travel allowance of Rs 19,200 and medical deduction of Rs 15,000 per annum. However, in 2019 interim budget, the standard deduction limit was raised to Rs 50,000. But, the demand for a raise in the limit has been there for long as the combined total of the replace deductions stood at Rs 34,200. The present limit of Rs 50,000 provides only slight extra savings to tax payers. Experts are of the belief that the FM in the upcoming budget may take the decision of raising the standard deduction limit to Rs 1 lakh per annum, added the Moneycontrol report.

What is Standard Deduction?
As per the Indian taxation laws, standard deduction can be described as a provision for salaried individuals and taxpayers getting pension. It permits individuals to seek claim for a deduction of the decided limit from their taxable income without the requirement to deposit any investment proofs or revelations. It is a flat deductions that salaried individuals can avail with depositing any proof or document to IT Dept or employer in order to avail this deduction. All employees whether they are working in private or government sector will be eligible to claim this deduction irrespective of the salary amount. Till FY 2022-24, only old regime was eligible for standard deduction but beginning from FY 2023-24, even salaried individuals can also claim for standard deduction of Rs 50,000 as per the new tax regime.

Insurance industry seeks hike in deduction under 80D: One of the other key demands of the stakeholders linked to personal finance includes raising the limit of tax deduction under 80D of the Income Tax Act. This provision deals with the tax exemption given on payment of medical insurance premiums, according to Business Standard.

Meanwhile, insurance industry has also been demanding for a raise in the threshold which is currently set at Rs 25000 to Rs 50,000 for individuals and Rs 75,000 from existing Rs 50,000 for elderly people, added the Business Standard report. To be clear, this provision is available to taxpayers opting for the old tax regime.