The standard deduction of Rs 40,000 in your salary may not require you to furnish medical bills. This is applicable to salaried tax payers and pensioners.
They would not have to furnish any bills or documents to claim the standard deduction of Rs 40,000 announced in the budget on Thursday, according to CBDT chairman Sushil Chandra.
"The budget, this time, has given a large benefit of flat Rs 40,000 as a standard deduction to the salaried class of taxpayers and pensioners.
"Earlier, some people were getting conveyance allowance and some medical allowance on the basis of production of bills, but now we have removed all individual allowances on production of certain bills among others. It is flat Rs 40,000 to every salary earner. You can straightaway claim it," Chandra said.
The Central Board of Direct Taxes (CBDT) is the policy-making body of the Income Tax department.
Chandra said the new measure will benefit all salaried employees, without the hassle of filing supporting documents or bills.
"Standard deduction means that it is without documentation. We will we give a flat Rs 40,000 deduction out of the salary," he said.
Till now, this category of taxpayers had to furnish medical bills and an undertaking for conveyance expenses to get benefit of Rs 19,200 under transport allowance and Rs 15,000 under the medical allowance.
The CBDT boss said the budget has come like "another consolidation of tax reforms of the country".
"We have been wanting to give benefits to all sections of the society including the middle class, the salaried class and the Micro, Small and Medium Enterprises (MSME) sector and this is what has been done in this budget," he said.
Chandra said the government has kept its promise and brought the tax rates of corporates down "to 25 per cent up to the turnover of Rs 250 crore, which is a very big step forward in consolidation of tax reforms".
"This (announcement) covers 99 per cent of the corporate sector and only 1 per cent, that is only about 7,000 companies, are in the tax bracket of 30 per cent tax... To add further, even for these big companies the effective tax rate is 26 per cent," he said.
When asked as to why the tax slabs were not altered in the favour of the taxpayers, Chandra said as far as personal taxation is the country is concerned, India is either on par with some countries or is much less in taxing the people.
"Hence, there was no need to tinker with tax slabs or rates. We are committed to ensure a very transparent and judicious tax system to the people," he said.
I think there (taxpayers) concerns, Chandra said, have been well accommodated in the budget on Thursday.