Finance 101: Understanding standard deduction in taxes as a beginner

English lifestyle Jul 23 2024 Author: Ishwi Singh Image Credits:FREEPIK

What is Standard Deduction?

English Standard Deduction is a fixed amount that can be deducted from the total taxable income. Image credits: FREEPIK

Standard Deduction

English Salaried employees, pensioners, and retired individuals can claim this deduction. Image credits: FREEPIK

Income tax

English Taxpayers do not need to provide proof of expenses or maintain records to claim this deduction. Image credits: FREEPIK

Tax deductions

English Claiming the standard deduction does not affect eligibility for other tax deductions. Image credits: FREEPIK

Tax regimes

English Taxpayers can choose between the old tax regime and the new tax regime. Image credits: FREEPIK

Budget 2024

English In Budget 2024, the tax slabs for new tax regime have been revised. Image credits: FREEPIK

Standard deduction

English For FY 2023-24, the standard deduction was Rs 50,000 for salaried and pensioned individuals. Image credits: social media

Standard deduction under new tax regime

English During Budget 2024 presentation, it was announced that the standard deduction in the new tax regime will be increased from Rs 50,000 to Rs 75,000. Image credits: X

What does it mean?

English For example: if your taxable income is Rs 8,00,000, you can claim a standard deduction of Rs 75,000 under new tax regime, reducing your taxable income to Rs 7,25,000. Image credits: FREEPIK

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