Pensioners Can Also Claim Standard Deduction Of Rs 40,000

In this year’s budget , Finance minister, Arun Jaitley  reintroduced  the provision of standard deduction of Rs.40,000/- for every salaried person. Central Board of Direct

Taxes has clarified that  now pensioners too can avail this deduction.This provision was abolished by Finance Act 2005 and its reintroduction  in budget 2018-19 is in place of the  transport and medical expenses  exemption  which was given till last financial year.

Till last year, a salaried individual was exempted from  paying tax on amounts up to Rs.15,000/- of medical expenditure and Rs. 19,200/- of transport allowance. Now these have been subsumed under Rs.40,000/- standard deduction.

IT department tweeted that a tax payer who is in receipt of pension from his former employer shall be entitled to claim a deduction of Rs.40,000/- or the amount of pension whichever is less , under section 16 0f the I T Act.