The standard deduction is reintroduced in budget 2018 and amended in Budget 2019, the purpose is to replace the medical allowance and traveling allowance for the salaried. The standard deduction for the salaried individual is effected from 1st April 2019.
…..the standard deduction is allowed to deduct by ₹ 50000 from FY 2019-20
What is the standard deduction?
Earlier the transportation allowance and medical allowance which were allowed to the employee for that they have to submit the bill of expenditure. The standard deduction is the replacement of transportation allowance and medical allowance. It is a fixed amount of deduction from the gross salary of the employee, which was permitted without submitting any proof.
From the financial year, 2019-2020 standard deduction of ₹ 50000 is permitted. Remeber in FY 2018-19 it is ₹ 40000.
Previously, medical allowance of ₹ 15,000 annually and a transport allowance of ₹ 19,200 per annum are replaced with the standard deduction of ₹ 40000, the effective additional benefit on account of the standard deduction would be an additional income exemption of ₹ 5,800.
Standard deduction for senior citizens
In one of the articles from NDTV ” Why Senior Citizens Are Real Beneficiaries Of Flat Deduction Of Rs. 40,000”
According to the income tax law, Senior citizen (pensioners) are also treated as salaried, so they are also qualified for the standard deduction of ₹ 50000.
According to the tax department, the pension received from the formal employer is treated as salaried.
Senior citizen (pensioners) unable to claim medical allowance & transport allowance, on the other hand, pensioners are allowed to get 100% benefit of a standard deduction financial year, 2018-2019.