Two types of standard deduction in income tax for 2022

 

The Standard Deduction is a deduction that can be taken from Income Tax, regardless of whether an expense was incurred or an investment was made by the individual.

This type of Income Tax Standard deduction is permitted at a standard rate and does not require any disclosures, investment proofs or expense bills.

There are two types of standard deductions in India.

1. Standard Deduction from Rent: A standard deduction @ 30% is permitted for income from rent.
2. Standard Deduction from Salary Income: Standard Deduction of Rs. Salary Income is eligible for a deduction of Rs.

Rent Income - Standard Deduction @ 30%

The heading Income from House Property describes Rental Income. To arrive at the Net Annual Value, a person who earns Rental Income must first reduce the municipal and other taxes that are paid to the Local Authority.

The rental income subject to the Standard Deduction is not affected by actual expenses. This Standard Deduction covers any expense such as maintenance, etc. that is necessary to keep the property in good condition. It is not necessary to keep proof of actual expenses incurred.

This standard deduction of 30% is allowed if a person receives rent from more than one property.

This Standard Deduction can only be taken from Rent received for renting an apartment/building, and not from Rent received from renting vacant land.

Standard Deduction from Salary

The standard deduction from Salary is Rs. Budget 2019 introduced the standard deduction from Salary of Rs. 50,000. It is effective for Financial Year 2019-20.

The employee can claim this deduction regardless of actual expenses. This deduction is not subject to proof or bills.

This deduction replaces Transport Allowance and Health Reimbursement , which were previously available to employees. Employees were required to submit bills to prove that they were entitled to these benefits. The standard deduction has been introduced to replace the Transport Allowance and Medical Rembursement deductions.

This is a cumulative deduction. If you received salary from two employers in the year, the maximum standard deduction would be the same: Rs. Rs. 50,000 (in aggregate). The standard deduction is allowed regardless of whether the income was received from a large company or a small business.

Other deductions allowed in income tax

There are many other deductions that can be taken, in addition to the Standard Deduction @ 30%. These Deductions are not available to Salaried Employees, but the rest are available to all employees.

Only Salaried employees can take deductions: Deduction for Entertainment Allowance, and Deduction to Professional tax. These Deductions are not the only ones available to Salaried Employees. There are also several exemptions that are available for salaried employees.