Standard deduction raised to Rs 90,000 in new regime; salaried staff advised to re-do Form 12BB

The standard deduction available to salaried taxpayers under the new tax regime has been raised to Rs 90,000, and the enhanced limit applies for the whole of the current financial year.

Drawing and Disbursing Officers have been instructed to recompute tax deducted at source for the remaining months so that excess deduction in the first quarter is adjusted before March, rather than leaving employees to claim a refund.

Employees who had submitted investment declarations assuming the old regime should review the comparison afresh. For most employees below a taxable income of Rs 12 lakh with limited housing-loan interest, the new regime remains the lower-tax option.

The revised Form 12BB should be submitted to the DDO before the last working day of the month to be reflected in the next salary bill.