The standard deduction is a flat deduction from salary or pension income under Section 16(ia). For FY 2025-26 (AY 2026-27) it is Rs 75,000 in the new tax regime (the default) and Rs 50,000 in the old regime. Every salaried employee and pensioner gets it automatically — no bills, receipts or proof are needed, and no separate claim is required. With the Rs 75,000 deduction plus the Section 87A rebate, salary up to about Rs 12.75 lakh can be effectively tax-free under the new regime.
Standard Deduction Amount — FY 2025-26
The amount depends only on your tax regime, not on your salary level. See our income-tax slabs for the rates that apply once the deduction is taken.
| Tax regime | Salary / pension | Family pension | Applies to |
|---|---|---|---|
| New regime (default) | Rs 75,000 | Rs 25,000* | Salaried employees & pensioners |
| Old regime | Rs 50,000 | Rs 15,000* | Salaried employees & pensioners |
* Family-pension deduction under Section 57(iia) = lower of one-third of the pension or the cap shown. Salary/pension deduction under Section 16(ia).
Under the new regime the Section 87A rebate makes tax nil up to Rs 12 lakh of taxable income. Add the Rs 75,000 standard deduction and a salaried person earning up to roughly Rs 12,75,000 gross pays no income tax. The old regime keeps the deduction at Rs 50,000 but lets you stack 80C, 80D, HRA and home-loan interest on top.
Who Can Claim the Standard Deduction?
The standard deduction is only for income taxed under the head "Salaries" (and pension, which is taxed as salary). It is available to:
- Salaried employees — every individual with salary income, whatever the amount, private or government.
- Pensioners — pension from a former employer is taxed as salary and gets the full Rs 75,000 / Rs 50,000 deduction.
- Family pensioners — a separate, smaller deduction under Section 57(iia): lower of one-third of the pension or Rs 25,000 (new) / Rs 15,000 (old).
It is not available to:
- Self-employed professionals and freelancers (no salary income) — they deduct actual/presumptive business expenses instead.
- Individuals with only business, capital-gains, house-property or other-source income.
The standard deduction cannot exceed your salary/pension income. If your salary for the year is only Rs 60,000, the deduction is limited to Rs 60,000 — it never turns income negative or creates a refund on its own.
What the Standard Deduction Replaced
Reintroduced in Budget 2018 at Rs 40,000, the standard deduction replaced two older salary perks that required documentation:
| Period | Old regime | New regime |
|---|---|---|
| FY 2018-19 | Rs 40,000 | — |
| FY 2019-20 to FY 2022-23 | Rs 50,000 | — |
| FY 2023-24 to FY 2024-25 | Rs 50,000 | Rs 50,000 |
| FY 2025-26 onwards | Rs 50,000 | Rs 75,000 |
It replaced the transport allowance (Rs 19,200/yr) and medical reimbursement (Rs 15,000/yr), which needed bills; the flat deduction needs none.
Standard Deduction: Old Regime vs New Regime
The new regime gives a bigger standard deduction (Rs 75,000) but blocks almost every other deduction. The old regime gives Rs 50,000 but lets you stack many more.
New regime (default)
- Standard deduction Rs 75,000
- Rebate u/s 87A up to Rs 12L taxable income
- Employer NPS u/s 80CCD(2) still allowed
- No 80C, 80D, HRA or home-loan interest
- Best when you have few deductions
Old regime
- Standard deduction Rs 50,000
- 80C up to Rs 1.5L, 80D, HRA, LTA
- Home-loan interest u/s 24(b) up to Rs 2L
- Rebate u/s 87A up to Rs 5L taxable income
- Best when total deductions are high
A common myth is that the new regime has "no deductions". The standard deduction is one of the few that does apply in the new regime — and at a higher Rs 75,000. Only the extra deductions (80C, 80D, HRA and the like) are lost when you move off the old regime.
Not sure which regime saves you more with the standard deduction?
Compare with an expert →How the Standard Deduction Is Claimed
You do not "apply" for it — it is built into the salary computation. In practice:
- 1Employer applies itForm 16 Part B nets it off salary
- 2Reflected in TDSLowers monthly TDS on salary
- 3Pre-filled in ITRAuto-populated from Form 16 / AIS
- 4Confirm & fileCheck the amount, then e-verify
- Salary or pension income for the year
- Correct regime selected (new is default)
- Form 16 Part B from your employer
- Amount pre-filled in the ITR salary schedule
- Deduction not exceeding your salary
- Each spouse claims separately if both salaried
If you change jobs mid-year, you still get only one standard deduction of Rs 75,000 / Rs 50,000 for the whole year — not one per employer. Each employer may apply it, so reconcile in your ITR to avoid a double claim and a demand notice.
Want us to pick the right regime and file your return accurately?
Get ITR Filing Help →- Section 16(ia) & 115BAC: incometax.gov.in
- Rs 75,000 (new regime): Finance (No.2) Act, 2024
- Family pension u/s 57(iia): raised to Rs 25,000 (new regime), AY 2025-26 onwards
- Income-tax Act, 2025 (continues the deduction, w.e.f. AY 2026-27)
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.