Budget 2023 | Standard deduction for salaried employees should be raised to Rs 1 lakh: Experts

Union Finance Minister Nirmala Sitharaman will present the full-year Budget 2023 on February 1, 2023. Citizens are awaiting the Budget announcements related to several tax changes, including the one on increase in the limit of standard deduction. Currently, a deduction of Rs 50,000 is provided to each and every employee irrespective of their cost to company (CTC). Now, experts want this limit raised to Rs 1 lakh.

“The standard deduction for salaried employees should be increased to reduce the employees' tax burden under section 16 of Income Tax Act. Unlike the taxation of gains from certain asset classes, the income tax slabs have not been significantly raised over the years. The cost of living has gone up but the purchasing power of salaried people has reduced significantly. As a result, many lower-income salaried individuals have found themselves pushed into higher tax brackets, despite their relatively modest income. So, we can expect that the standard deduction will be increased to Rs 1 lakh in Budget 2023," said Neha Nagar- Finfluencer and Founder at TaxationHelp, in an interaction with CNBC-TV18.com.

This increase is intended to help reduce the tax burden on salaried employees.