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

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

Earlier now.jpg


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

Earlier now part 2.jpg

 

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

 

 

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

 

View Answer

 

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
  1. Tax Practical
  2. Budget Amendments - Changes in 2017-18
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CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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