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Amendment relating to salary- standard deduction (40K) allowed and certain medical reimbursement made taxable perquisite

Budget - By: - CA DEV KUMAR KOTHARI - Dated:- 3-2-2018 Last Replied Date:- 18-4-2018 - Links and references: Proposal to amend S.16 and 17 Earlier Article webhosted on 10th October 2017: Budget 2018 REQUEST FOR RELIEF TO SALARY EARNERS: Relief to wages and salary earners - reintroduce standard deduction and allow depreciation to salary earners-will boost economy also Earlier article: In above article author has requested to re-introduce standard deduction and also to allow depreciation on certai .....

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sed amendment is in very simple term. As per proposal irrespective of amount of taxable salary the assessee will be entitled to get a deduction of ₹ 40,000 or taxable salary whichever is less. Thus suppose if a person has worked for few days or months and his salary is just 40,000 for a previous year, , then he will be entitled to deduction equal to salary being the same amount. If his salary is less say ₹ 20,000 the deduction shall be restricted to ₹ 20,000. If salary exceed a .....

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d to amount of salary because with increase in salary, expenses in connection with employment also increases. Therefore, a provision can be made to allow deduction equal to 10% of salary subject to maximum of ₹ 200000. Depreciation on assets used in relation to employment should also be allowed. Proposal is reproduced below with highlights added: Statutory Provisions THE FINANCE BILL, 2018 7. Amendment of section 16. In section 16 of the Income-tax Act, after clause (i) [as omitted by sect .....

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r making certain deductions specified therein. It is proposed to insert a new clause (ia) in the said section so as to provide for deduction of forty thousand rupees or the amount of the salary, whichever is less, for the purpose of computing the income chargeable under the said head. This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years. 8. Amendment of section 17 In section 17 of the Income-tax Act, i .....

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