Standard Deduction for Salaried Employees: Rs 75,000 or 50,000?
What the standard deduction is, how much salaried employees and pensioners get in the new and old tax regimes, and how it shows up in your salary.
If you are salaried in India, the standard deduction is the simplest tax benefit you get - no bills, no investment proof, no form. It is a flat amount subtracted from your salary before tax is calculated. Here is exactly how much the standard deduction is in 2025-26, how it differs between the old and new regimes, and who can claim it.
What is the standard deduction?
The standard deduction is a fixed reduction from your gross salary or pension income under the head "Salaries". Your employer applies it while computing your taxable salary, so you never claim it separately - it shows up automatically in your Form 16. It replaced the old transport and medical allowances in 2018 and has been revised upward since.
Standard deduction amount: old vs new regime
| Tax regime | Standard deduction (salaried and pensioners) |
|---|---|
| New regime (default) | Rs 75,000 |
| Old regime | Rs 50,000 |
The new regime figure of Rs 75,000 applies from FY 2024-25 onward, raised from Rs 50,000 by the Finance (No. 2) Act, 2024. The old regime stays at Rs 50,000. This difference alone does not decide which regime is better for you - the full comparison depends on your other deductions, which new tax regime vs old regime walks through with numbers.
Who can claim the standard deduction
- Salaried employees in both regimes - private or government, any salary level.
- Pensioners receiving pension taxable under "Salaries" - the same Rs 75,000 or Rs 50,000 applies.
Business owners, freelancers and professionals cannot claim it - their income is not salary. Family pension recipients get a separate, smaller deduction (one-third of the pension or Rs 25,000, whichever is lower, under the new regime).
How it shows up in your salary and tax
Say your gross salary is Rs 9,00,000 under the new regime. Your employer subtracts Rs 75,000 first, so taxable salary becomes Rs 8,25,000, and slab rates apply to that figure. This is one reason your in-hand calculation differs from the CTC on paper - CTC vs in-hand salary explains the rest of that chain. Because the employer handles it, there is nothing to submit: no proof, no declaration, no investment.
Standard deduction while filing your return
When you file your ITR, the pre-filled return already carries the deduction via your Form 16. Check that the "Income chargeable under the head Salaries" figure is net of the standard deduction - if it is not, you can add it yourself in the salary schedule. Salaried filers generally use ITR-1; the how to file ITR for salaried employees guide covers the full filing flow for AY 2026-27.
Frequently asked questions
Is the standard deduction available in the new tax regime?
Yes. The new regime allows a standard deduction of Rs 75,000 for salaried employees and pensioners, even though most other deductions like HRA and 80C are not available there.
Do I need to submit any proof to claim it?
No. It is automatic - your employer deducts it while computing taxable salary, and it appears in your Form 16. There is no investment, bill or declaration involved.
Can pensioners claim the standard deduction?
Yes. Pension taxable under the head "Salaries" qualifies for the same standard deduction - Rs 75,000 in the new regime and Rs 50,000 in the old regime. Family pension has a separate, smaller deduction instead.
Is the standard deduction over and above Section 80C?
Yes. In the old regime, the standard deduction applies first and Section 80C deductions (up to Rs 1.5 lakh) apply separately after it. In the new regime, 80C is not available but the standard deduction is.
Sources
- Income Tax Department, incometax.gov.in - salary income and standard deduction provisions
- Finance (No. 2) Act, 2024 - standard deduction raised to Rs 75,000 under the new regime
