Standard Deductions for Income Tax may be back

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Tuesday, June 16, 2009
This article is posted in Income Tax category and has 4 Comments so far.

Ahead of the annual budget, here’s some cheer for salaried employees and pensioners. The finance ministry is considering bringing back standard deduction of up to Rs 20,000 in individual taxable incomes.

According to revenue department officials, the government may be willing to take a small hit in return for a spike in spending that it hopes will result from a bigger disposable income with the salaried classes.

Till the budget for 2005-06, a standard deduction of Rs 30,000 or 40 per cent of income, whichever was lower, was allowed to salaried employees with an annual income between Rs 75,000 and Rs 5 lakh. For those earning more, the standard deduction was fixed at Rs 20,000.

The standard deduction was meant to compensate salaried people for the fact that self-employed small businesspersons or entrepreneurs paid tax only on their net income after deducting business expenditure.

Source : Indian Express


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4 Responses to “Standard Deductions for Income Tax may be back”

  1. Ajoy Sankar Roy said on Friday, June 19, 2009, 12:46

    When the 60% rest arrear payment will be made?

    Reply

  2. N S POONIA said on Sunday, June 21, 2009, 12:31

    Really, Standard Deduction earlier allowed @ 33.33% to the salaried employees shall meet the end of justice in lieu of compensation for the expenditure incurred towards earning of the salary and accordingly, as such salaried taxpayers shall pay tax on net salary just like an individual businessman pays tax on net income after deducting all the expenses incurred towards earning of the said income. Otherwise, salaried taxpayers may also be allowed to claim all such expenses incurred for earning of the salary just like an individual businessman claims as such expenses for the same purpose and under such a situation, there is no need to allow deduction as Standard Deduction, separately. It is natural justice if all individual taxpayers are given equal facility & liability under the Indial Income Tax Law when their status is ‘Individual’ and the income tax slabs are also the same.

    Reply

  3. sangeeta said on Wednesday, June 24, 2009, 13:10

    Is tution fees reimbursement is taxable income?

    Reply

  4. sundararam varanasi said on Tuesday, June 30, 2009, 17:43

    A writ petition filed by me seeking annulment of amendment to sec.16(withdrawal of Standard Deduction) is pending with the Hon’ble A P High Court. It is hoped that better counsel would prevail upon the central government and standard deduction would be restored in the coming budget, obviating the pursuit of the legal recourse by me

    Reply

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