Pranab Mukharjee is going to provide relief to the salaried class, by taking the route of restoring standard deduction rather than increasing income tax slabs in an apparent attempt to put money into the pockets of the salaried class, finance minister may bring back standard deduction on income tax when he presents the Budget.
The provision of standard deduction, which was given to employees to compensate for the expenses incurred by them under heads such as conveyance, was discontinued by former finance minister P Chidambaram with effect from April 1, 2006.
The Budget would definitely bring relief to the salaried class, said an official inside North Block, and also hinted about the likely move. “There would be efforts to put more cash into the pockets of consumers. It may marginally impact tax collection but will boost consumerism and thus indirectly contribute towards tax collection,” he said.
In fact, a large section of the salaried class, including the 5.5 million central government employees, supported the Congress despite BJP’s poll promise of exempting individuals with an annual income of up to Rs 3 lakh from income tax. So its Congress turn to return back the favour.