In todays budget, Mr. jaitely introduced Rs. 40,000 standard deduction as a relief to salaried class at a loss of 8000 crore loss to the government.
By allowing 40,000, following allowances withdrawn -
1. transport - 19,200
2. Medical - 15,000
Total - 34,200
Net addl deduction - 5800
Tax @ 30% on this - 1740/-
Tax payers = 2 crore
Total - Rs. 3,480 crore
Let us understand the actual loss to tax payers. Till now some companies used to allow transport reimbursement on actual expenses rather then transport allowance. On an average this amount was Rs. 7,000 p.m.
So, for year it was = 84,000
Plus, medical reimbursement = 15,000
Total = 99,000
Net loss to tax payer - (99,000 - 40,00)*30% = 19,700 in other words net gain to goverment in the form of additional tax = 19,700 per person.
Please note, i have considered 7,000 reimbursement on the lowest side, some companies allows even 15,000 - 30,000 p.m as transport reimbursement.
So, instead of relief to salaried class, Mr. Jaitely has played a big game and now will take more tax.
salaried class is still thinking goverment has given a big relief!
CAclubindia
