The existing provision of clause (ii) sub-section (14) of Section 10 of the Act, provides the exemption of conveyance or transport allowance of Rs. 1,600 p.m. will be provided to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of office.
This section also provides exemption of transport allowance of Rs. 3,200 p.m. will be granted to an employees who is blind or deaf and dumb or orthopedically handicapped with disability of the lower extremities of the body, to meet his expenditure for traveling between his residence and place of the office.
The existing provisions of clause (v) of the first proviso to sub-section (2) of Section 17 provides that reimbursement of medical expenditure incurred by an employee is exempt up to an actual amount incurred or Rs.15,000 whichever is higher. i.e., maximum exemption of allowance of medical expenditure incurred by an employee will be Rs.15,000.
Proposed Amendments for A.Y.2019-2020
A standard deduction of Rs.40,000 is proposed to be allowed to salaried employees in lieu of present exemption in respect of Conveyance allowance of Rs.19,200 p.a. plus reimbursement of medical expenditure of Rs.15,000.
It indicates an additional benefit of Rs. 5,800 per annum which will result in to a tax saving of following amount for different type of tax payers:
Individuals in tax slab of 30% can save up to approx. Rs.1,600
Individuals in tax slab of 20% can save up to approx. Rs.1,160
Individuals in tax slab of 10% can save up to approx. Rs.580
Moreover, presently “Education Cess on income tax @2% and Secondary and Higher Education Cess” on income tax is @1% is levied.
Government proposed amendment and introduce a new cess named “Health and Education Cess” to be levied @4% of income tax including surcharge.
Therefore, now education cess and secondary and higher education cess clubbed in Health and Education cess.
Mr. Abhishek receives the following emoluments during the previous year ending 31.03.2019.
|Medical Expense reimbursed||Rs.25,000|
|Transport allowance||Rs.1,800 p.m.|
|Professional tax paid by employer||Rs.2,000|
Calculation of Gross salary as per proposed amendment A.Y.2019-20 will be as under:
|Particulars||Amount in Rs.|
|Medical Expense reimbursed||25,000|
|Transport allowance (1800 p.m.x12)||21,600|
|Professional Tax paid by employer||2000|
|Less: Standard deduction
Profession Tax Paid by Employer