Budget 2019 Gives Standard Deduction of Rs. 50000

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What is Standard Deduction?
Standard Deduction is the deduction allowed in income tax where no investment proofs or expense bills are required. It is given irrespective of expenses incurred.
Standard Deduction from Salary
The Interim Budget presented on February 2019 and included various tax benefits for salaried and middle class. The standard deduction has been raised to Rs. 50000, an additional amount of Rs. 10000. The taxable salary comes down thanks to the standard deduction. Let’s understand this with the help of an example:

Particulars
AY 2019-2020
AY 2020-2021
Gross Salary
Rs. 600000
Rs. 600000
Transport allowance
Nil
Nil
Medical allowance
Nil
Nil
Standard Deduction
Rs. 40000
Rs. 50000
Net Salary
Rs. 560000
Rs. 550000

standard deduction


Benefits
The standard deduction favors salaried individuals in two ways. First, the income tax liability is reduced and second, paperwork is also reduced.
This benefit of standard deduction can be claimed by salaried class as well as pensioners who receive pension directly from their previous employers.
Standard Deduction from Rent
The rental income for rental income is given at 30% of Net Annual Value. This deduction is allowed even when the actual expenditure on property is lower or higher. The deduction is given irrespective of the actual expenditure incurred. Gross Annual Value is the highest of rent received, fair market value or municipal valuation. When municipal taxes are deducted from Gross Annual Value, Net Annual Value comes out. In case of self occupied house property, the annual value is nil and thus, the standard deduction is zero in that case.
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