Finance Minister Arun Jaitley disappointed the working class as he announced there would be no change in the personal income tax for salaried employees for the current fiscal year. Jaitley said, “The Government has made many positive changes in the personal income tax rates applicable to individuals in the last three years, therefore, I do not wish to make any changes to this.”
Jaitley had a bit of good news for the working class as the Government plans to increase the standard deduction of Rs. 40,000 for transport allowance and reimbursement of medical expenses. The Finance Minister was quoted saying, “Standard deduction shall significantly benefit the pensioners also, who normally do not enjoy any allowance on account of transport and medical expenses. The revenue cost of this decision is approximately Rs. 8,000 crores. The total number of salaried employees and pensioners who will benefit from this decision is around 2.5 crores.”
He further stated, “Apart from reducing paperwork and compliance, this will help middle class employees even more in terms of reduction in their tax liability.” During the last Budget speech Jaitley had proposed to reduce the tax on income between Rs. 2.5 lakh and Rs. 5 lakh from 10% to 5% in the Budget.
The Finance Minister also spoke about incentives for the senior citizens in the Country. He also announced that the limit of deduction for health insurance premium and medical expenditure will be increased from Rs. 30,000 to Rs. 50,000 under the Section 80D for senior citizens.
