Are Pensioners eligible for standard deduction of Rs 40,000 too ?
After the introduction of standard deduction of Rs. 40,000 in The Finance Budget, 2018 by our Hon’ble Finance Minister Arun Jaitley ji, many representations were sent to the CBDT seeking clarification regarding the allowability of above deduction to the pensioners.
Taking in view of the above representations, CBDT issued a press note on 5th April, 2018 in which it clarifies that it has amended Section 16 of the Income Tax Act, 1961 which now states that, “a taxpayer having income chargeable under the head ‘Salaries’ shall be allowed a deduction of Rs 40,000/- or the amount of salary, whichever is less, for computing his taxable income.”
The below is the press release issued by the CBDT on 5th April,2018.
Since, the pension received by the pension holder is chargeable under the head “Income From Salary”. Hence, now it is evident that pensioners are also eligible for standard deduction of Rs. 40,000.
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Standard Deduction of Rs. 40,000/- for pensioners
