New Delhi: Accounting regulator Chartered Accountants of India (ICAI) has suggested bringing back standard deduction in the regular budget for 2009-10 which if accepted will be cheered by millions of salaried employees.
“Standard deduction should be restored,” ICAI said in its pre-budget memorandum to the government.
If the suggestion goes well with the government, it could result in restoration of standard deduction of some amount in the taxable income of salaried employees and could lessen the tax burden on them.
“This is a form of relief measure we are suggesting for salaried class. If there are some expenses which are allowable in case of other head, then why not salary ?” ICAI president Uttam Prakash Aggarwal told PTI.
Standard deduction was given to employees to compensate for the expenses incurred by them like conveyance for earning their salaries.
Taking into account the recommendations of the Kelkar Committee on direct taxes, the then finance minister P Chidambaram had announced abolition of standard deduction in the Budget 2005-06. It was abolished with effect from 1 April, 2006.