Standard Deduction for Salaried Employees Transport,Medical Reimbursement Removed

Now all Employees will get a Standard Deduction of 40000 per annum

Hence,their Income will be reduced by 40000 while calculating tax

However Employees will not get Benefit of 

Medical Reimbursement of 15000 per annum

Transport Allowance of 1600 per month(19200 annual)

which they enjoyed earlier

Earlier 

Salaried Employees enjoyed

Medical Reimbursement of 15000 per annum

Transport Allowance of 1600 per month(19200 annual)

Total Savings=15000+19200=34200

Now

No benefit of Medical Reimbursement and Transport Allowances

Instead Standard Deduction available of 40000

This 40000 will be reduced while calculating Income from Salaries

Effective Tax Benefit

=40000(New)-34200(Old)

=5800

 

Tax Benefit Per annum

Slab Rate	Effective Deduction	Tax Benefit
0%	5800	0
5%	5800	290
20%	5800	1160
30%	5800	1740

Note

The above tax benefit is subject to Cess

(This cess was earlier 3%,now 4%)

 

Example 1

Suppose a person received

Calculate Tax as per Old Slab Rate and New Slab Rate

 

Note

Effective Benefit will be more for those who did not receive Medical Reimbursement and Transport Earlier

Example

Person Receiving Flat Salary

Person Receiving Pension Income

 

 

Example 2

Suppose a Senior Citizen received Pension of 35000 per month

Calculate Tax as per Old Slab Rate and New Slab Rate

 

Note

Standard Deduction Benefit is only for Inome from Salaries

It is not for  business or any other income)

Example 3

Suppose there are 2 brothers A and B

A is in job earning 30000 salary

B is in business earning 30000 monthly

Calculate Tax for both A and B