Budget 2019: Piyush Goyal distributed taxes to the middle class, including doubling the income tax exemption limit to Rs 5,000 and raising the standard deduction to Rs 50,000, and granting concessions on interest income from bank deposits and the rent. This is what it means. Finance Minister Piyush Goyal on Friday presented the latest budget of the Modi government in Lok Sabha. As 2019 is the election year, the finance minister has tried to appease the middle class and farmers in the budget by announcing tax cuts and an income plan for farmers.
The Budget, however, is a complex draft and, often, people with little knowledge of business and economics struggle to understand the Budget discourse. Are you among those who find it difficult to understand the terminologies used in a speech about the budget? Well, we have tried to solve your problems with some explanators. What is the standard deduction?
The government has announced an increase of Rs 10,000 in the standard deduction from Rs 40,000 to Rs 50,000 per year. The Standard Deduction or SD is a fixed amount in the salary of an individual that is not taxed and, therefore, reduces the general taxable income, regardless of the expenses or investments made.
The total income is not the same as the taxable income, since the government allows exemptions that can be deducted from the gross salary and, therefore, can not be taxed. The increase of the SD is due to the tax exemptions that would benefit the salaried class. Unlike other tax-saving documents (read: 80c), one does not need to provide documents or evidence to claim SD.