In the Union Budget context, by how much was a standard deduction allowed to salaried taxpayers in place of separate exemptions for transport allowance and reimbursement of medical expenses?

Introduction / Context:
In one of the recent Union Budgets, the government reintroduced a standard deduction for salaried taxpayers. This standard deduction replaced earlier specific exemptions for transport allowance and reimbursement of medical expenses, simplifying the tax structure for employees. The question asks for the amount of this standard deduction, which is a straightforward factual point frequently tested in general awareness and banking exams.

Given Data / Assumptions:

• The question refers to the budget proposal that replaced separate exemptions with a single standard deduction.
• The standard deduction amount introduced for salaried taxpayers was a fixed rupee value.
• Options given are Rs. 20,000, Rs. 40,000, Rs. 50,000 and Rs. 80,000.
• We assume the reference is to the initial reintroduction of standard deduction in that budget, not later revisions.
• The correct benchmark figure widely quoted in news and exam material is Rs. 40,000.

Concept / Approach:
A standard deduction is a fixed amount that is deducted from salary income without the need for detailed proof of expenses. When it was reintroduced, the government explicitly announced that salaried individuals would receive a standard deduction of Rs. 40,000 in place of exemptions for transport allowance and medical reimbursement. To answer correctly, one simply needs to recall this widely publicised figure and match it with the options. The other numbers are distractors that do not match the budget announcement.

Step-by-Step Solution:
Step 1: Recall reading or hearing about the budget where the finance minister announced a standard deduction for salaried taxpayers. Step 2: Remember that the amount of this deduction was Rs. 40,000 per financial year. Step 3: Look at the options and identify Rs. 40,000 among them. Step 4: Confirm mentally that neither Rs. 20,000, nor Rs. 50,000 nor Rs. 80,000 were mentioned in that announcement. Step 5: Select Rs. 40,000 as the correct answer.

Verification / Alternative check:
Another way to verify is to think about the earlier exemptions that were being replaced. Transport allowance exemption and medical reimbursement together usually added up to a moderate amount. The new standard deduction was set so that the change would be broadly revenue neutral or slightly favourable for many taxpayers, which matched a figure around Rs. 40,000. A much lower figure such as Rs. 20,000 would have been criticised as inadequate, while a higher figure like Rs. 80,000 would have had much larger revenue implications. This reasoning supports the recalled figure of Rs. 40,000.

Why Other Options Are Wrong:
Rs. 20,000: This amount is too low and does not match the value actually announced in the budget for the standard deduction. Rs. 50,000: Although later discussions and changes have mentioned higher deductions, the specific budget proposal in this question refers to Rs. 40,000, not Rs. 50,000. Rs. 80,000: This figure is far above the originally announced deduction and would have implied a much larger tax benefit than what was introduced. Any blank option: Not relevant, since the question clearly expects a numeric amount in rupees.

Common Pitfalls:
Candidates may confuse different budget years and pick Rs. 50,000 based on later discussions or media headlines, instead of the original figure. Others might not pay attention to the wording that mentions replacing transport and medical exemptions and instead guess based on what seems like a round number. To avoid such errors, it is helpful to connect Rs. 40,000 specifically with the reintroduction of the standard deduction and then track any later changes separately in one's notes.

Final Answer:
The Union Budget allowed a standard deduction of Rs. 40,000 for salaried taxpayers in place of separate exemptions for transport allowance and medical reimbursement.