Biting the bullet of a populist budget, the interim budget 2019 also enhanced the standard deduction limit for the salaried tax payers to 50,000.

A standard-deduction reduces your taxable income thereby reducing your tax liability. Standard deduction was re-introduced last year and the limit was set at 40,000 and was applicable in lieu of transport allowance and medical reimbursements that totaled up to 34,200 in a year. So the actual relief to tax payers were marginal. It was about 1,810 for someone in the highest tax bracket of 31.2%.

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This budget the standard deduction has been enhanced from 40,000 to 50,000. This increase of 10,000 will result in tax savings of 3,120 for individuals in the highest tax bracket of 31.2% excluding surcharge.

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