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Kotak e-Term

Features

  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**
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Ref. No. KLI/22-23/E-BB/492

T&C

Budget 2024: Standard Deduction for Salaried Individuals may Rise to ₹1 Lakh

For 2024-25, the standard deduction is ₹75,000 for salaried employees and ₹25,000 for family pensioners under the new tax regime, providing significant relief to taxpayers.

  • 2,000 Views | Updated on: Oct 22, 2024
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The process of taxing can be confusing, but there are ways to make things easier. One such way is the standard deduction. It is like a discount on your income before you calculate taxes. This means you pay less tax. Let us understand budget 2024 standard deduction for salaried individuals, and how it works under the new tax rules. Whether you’re an employee or a retiree, this guide will help you understand your taxes better.

What is the Standard Deduction in the Taxation System?

The Standard Deduction in the Indian taxation system is a fixed amount that taxpayers can deduct from their gross salary income to arrive at their taxable income. It is a flat deduction that simplifies the calculation of taxable income, reducing the need for itemized deductions for expenses incurred during income earning.

As of the financial year 2024-25, the standard deduction for salaried employees and pensioners is as follows:

  • For salaried employees and pensioners: A standard deduction of ₹75,000 from their gross salary income.
  • For family pensioners: A standard deduction of ₹25,000 under the new tax regime or one-third of the family pension received, whichever is less.

These amounts are subject to change as per the annual Union Budget and subsequent amendments by the Government of India. The standard deduction aims to relieve salaried individuals and pensioners by reducing their taxable income, thereby reducing their overall tax liability.

Is Standard Deduction Applicable under the New Tax Regime?

The standard deduction is applicable under the new tax regime as announced in the Union Budget. Previously, the new tax regime did not allow for any deductions, but this has changed to include a standard deduction for salaried employees and pensioners.

For the financial year 2024-25, the new tax regime allows a standard deduction of ₹75,000 for salaried employees and pensioners. Family pensioners can also claim a standard deduction of ₹25,000 or one-third of the family pension received, whichever is less. This inclusion of the standard deduction under the new tax regime offers additional relief to taxpayers opting for it over the old tax regime.

Insurance Industry wants hike in Deduction under 80D

The insurance industry has been consistently advocating for an increase in the deduction limit under Section 80D of the Income Tax Act. The reasons for this demand are as follows:

  • Rising Healthcare Costs: The cost of healthcare has been escalating rapidly, making health insurance premiums more expensive.
  • Low Insurance Penetration: Despite the rising costs, India still has a relatively low insurance penetration rate. A higher deduction can incentivize more people to buy health insurance.
  • Financial Protection: Health insurance provides a crucial financial safety net, especially in case of medical emergencies. A higher deduction can encourage people to prioritize health insurance.

FAQs on Budget 2024 Standard Deduction for Salaried Individuals


1

What is the standard deduction for salaried persons in Budget 2024?

The standard deduction for salaried individuals under the new income tax regime has been increased to ₹75,000 for 2024-25. However, under the old tax regime, it remains at ₹50,000.



2

Who is eligible for the standard deduction?

All salaried individuals are eligible for the standard deduction, irrespective of their income level.



3

How does the standard deduction affect my taxable income?

The standard deduction is directly subtracted from your total income, thereby reducing your taxable income and the amount of tax you pay.


4

Can I claim additional deductions along with the standard deduction?

Yes, you can claim additional deductions like those under Section 80C, 80D, etc., along with the standard deduction. However, this is only applicable under the old tax regime.

Suggested Readings

1. Section 80D - Medical and Health Insurance Tax Benefits Under Section 80D

2.How to File Income Tax Return - Everything You Need to Know
Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Kotak e-Term

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Features

  • Life Cover till 85 years for Life & Life Secure Option
  • 3 Payout Options
  • Special Rates for Women
  • Option to exit the policy with premium refund at the age of 60*
  • Special Rates for Non-Tobacco Users
  • Free Medical Check Up every 5th year**
Want to Know More?
Invest NOW

Ref. No. KLI/22-23/E-BB/2435

T&C

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The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.

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