Standard Deduction (India)
Definition
A flat deduction from salary and pension income available to Indian taxpayers without the need to prove expenses. The amount and its availability under each tax regime are set by the Finance Act and should be checked for the year concerned.
Related Terms in India GST
HRA Exemption
A partial exemption from tax on House Rent Allowance received by salaried employees in India under the old regime, computed as the least of the actual HRA, rent paid over a threshold, and a percentage of salary that depends on the city.
Presumptive Taxation
A simplified method of taxing income at a deemed percentage of turnover or receipts rather than on actual profit computed from full books. It reduces compliance for eligible small businesses and professionals within prescribed limits.
Minimum Alternate Tax (MAT)
A tax ensuring companies with large book profits but low taxable income due to exemptions still pay a minimum amount, computed on adjusted book profit. Credit for MAT paid can be carried forward and set off in later years.
Dividend Distribution Tax (DDT)
A tax formerly levied on Indian companies when they distributed dividends. The system was changed so that dividends are now taxed in the hands of shareholders rather than through DDT at the company level.
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