Keeping the income tax rates and slabs unchanged, Arun Jaitley introduced a Rs 40,000 Standard Deduction for salaried employees and pensioners in lieu of the present exemption in respect of transport and medical expenses, in the Union Budget presented on Thursday in Parliament.
At present, no tax is applicable on Rs 19,200 of transport allowance and medical expenditure of up to Rs 15,000. This has now been subsumed into the new Standard Deduction of Rs 40,000 which may mean very little benefit in tax saving considering that health and education cess has gone up.
Senior citizens will get higher exemptions on income from interest on bank and post office deposits, health insurance premium and critical illness expense.
