Salaried Individuals get a flat deduction of INR 40,000 on taxable. So this deduction will result in tax reduction of upto INR 12,360
This benefit comes by removing earlier exemption eligible for medical reimbursements upto INR 15000 and and exemption towards transport allowance upto INR 19200.
Incrementally all salried individuals get additional benefit by way of income exemption up-to INR 5800* which will yield a tax reduction of 1800 approximately . This change will also help avoiding troubles during document proof submission to employer for medical reimbursements. Thus claim a flat deduction of taxable income without any documentary proofs.
*(INR 40,000 – transport allowance 19,200 – medical reimbursement 15,000)
Increased tax rate :
Currently there is a cess paid by individuals at 3% on tax. This increased by 4%. so effectively if your tax rate is 30%., the amount of tax payable so far with cess is 30.9%. Now with the increase in cess by 1%, the effective tax payable with cess increases to 31.2%