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 ofMedical 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
**
**

Basic Salary | 30000 |

Transport | 1600 |

Medical Reim | 1250 |

Speacial Pay | 7150 |

40000 |

Calculate Tax as per Old Slab Rate and New Slab Rate

View Answer

NoteEffective 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

View Answer

Note

Benefit of Standard Deduction is only for Salaried Individuals(Not for those having Business Income)

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

View Answer