Standard Deduction, Jan. 27 -- Income taxpayers can lower their income without providing any documentation or disclosures by using the standard deduction, which is a fixed sum subtracted from taxable salary income. After being eliminated for several years, the standard deduction provision was reinstated in the 2018 budget announcement. Under Section 16 of the Income Tax Act of 1961, it was initially implemented in 1974.

"In FY 2004-05, salaried individuals could claim a standard deduction of Rs.30,000 or 40 per cent of their salary, whichever was lower, provided their annual income did not exceed Rs.5 lakh. For those earning above Rs.5 lakh, the standard deduction was Rs.20,000. However, this deduction was withdrawn starting from FY 2005...