Deductions & ExemptionsAug 5, 2025
What is the standard deduction for salaried employees in India?
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The standard deduction is a flat deduction from your salary or pension income. No proof of expenses is needed.
Standard deduction amounts:
| Tax Regime | Standard Deduction |
|---|---|
| New tax regime (FY 2025-26) | ā¹75,000 |
| Old tax regime | ā¹50,000 |
Who can claim it:
- Salaried employees (receiving salary under Section 15)
- Pensioners (receiving pension under Section 17)
- Family pension recipients (ā¹15,000 or 1/3 of pension, whichever is lower, under Section 57)
How it works in the new regime:
Under the new tax regime, the ā¹75,000 standard deduction combined with the Section 87A rebate makes income up to ā¹12,75,000 effectively tax-free for salaried individuals. Here's the math:
- Total income: ā¹12,75,000
- Less standard deduction: ā¹75,000
- Taxable income: ā¹12,00,000
- Tax on ā¹12,00,000 under new regime: ā¹80,000
- Less Section 87A rebate: ā¹80,000
- Net tax: ā¹0
Important points:
- The standard deduction replaced the earlier transport allowance (ā¹19,200) and medical reimbursement (ā¹15,000) from FY 2018-19
- It is available in both the old and new tax regimes (one of the few deductions allowed in the new regime)
- It is a per-person deduction. If both spouses are salaried, each can claim it separately
- No bills, receipts, or investment proofs required. Your employer automatically factors it into TDS calculations
The standard deduction was increased from ā¹50,000 to ā¹75,000 in the new regime starting FY 2024-25 (Budget 2024). Under the old regime, it remains at ā¹50,000.
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Disclaimer: This information is for general educational purposes and is not professional tax advice. Tax situations vary. Consult a qualified tax professional for advice specific to your circumstances.