Clause 19 of Income Tax Bill, 2025 restructures salary ...

New Income Tax Bill Proposes Two-Tier Standard Deduction System and Streamlined Salary Benefits Under Clause 19

February 28, 2025

Notes Bill

Clause 19 of Income Tax Bill, 2025 restructures salary deductions by consolidating provisions from Sections 16 and 10 of Income Tax Act, 1961 into a comprehensive tabular format. Key modifications include a two-tier standard deduction (Rs. 75,000 for taxpayers under section 202(1) and Rs. 50,000 for others), streamlined gratuity provisions under Serial Numbers 3-6, and rationalized pension and leave salary provisions under Serial Numbers 7-9 and 13-14 respectively. The amendment simplifies Voluntary Retirement Scheme benefits with a Rs. 5,00,000 limit and consolidates retrenchment compensation provisions. This restructuring aims to enhance administrative efficiency, improve compliance, and reduce potential litigation through clearer computation methodologies and reduced cross-referencing requirements.

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Clause 19 of Income Tax Bill, 2025 restructures salary ...

New Income Tax Bill Proposes Two-Tier Standard Deduction System and Streamlined Salary Benefits Under Clause 19

February 28, 2025

Notes Bill

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