Income Tax New Rules: Even if the Finance Minister does not announce it, the new rules for income tax exemption will be applicable..
The Finance Ministry may announce tax exemption. Sources say that under the new system, i.e. New Tax Regime, increasing the standard deduction limit is being considered. If sources are to be believed, in the first budget of her third term, Finance Minister Nirmala Sitharaman may announce an exemption for the middle class.
Finance Minister Nirmala Sitharaman will review these internal assessments with other government branches and the Prime Minister's Office before taking a final decision.
In last year's budget, the Finance Minister had proposed a standard deduction of Rs 50,000 for taxpayers and pensioners working on salary under the new regime. If someone does not opt out of this, then it will be implemented by default i.e. automatically. Apart from this, the exemption has been increased for taxable income up to Rs 7 lakh under Section 87A. The highest surcharge has also been removed under the new regime.
The standard deduction limit was initially set at Rs 40,000 to help salaried individuals cover medical and transport expenses and was increased to Rs 50,000 in 2019. Considering the current cost of living and inflation, this limit is not considered sufficient. It is expected that it may be increased to at least Rs 1 lakh.
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