What is the standard deduction for salaried employees?

₹75,000 under the new tax regime and ₹50,000 under the old. The gap opened in the Finance (No. 2) Act, 2024, which raised the new-regime figure from ₹50,000 to ₹75,000 while leaving the old regime alone — a deliberate nudge, since the new regime disallows almost everything else. It is a flat amount rather than a percentage, so it is the same on a ₹6 lakh salary as on a ₹60 lakh one.

Do I need to submit any proof to claim it?

No. That is the entire point of it. There are no bills, no receipts, no declaration and no investment requirement — your employer applies it automatically when computing TDS, and it appears in Form 16, now Form 130 from April 2026. When it was reintroduced in 2018 it replaced the transport allowance and medical reimbursement, both of which did require paperwork, and removing that paperwork was much of the stated rationale.

Do pensioners get the standard deduction?

Yes, in full. Pension from a former employer is taxed under the head "Salaries", so a pensioner draws the same ₹75,000 in the new regime or ₹50,000 in the old as any working employee. CBDT confirmed this position, and it applies regardless of age. What does not qualify is family pension — the pension paid to a family member after the employee has died — which is taxed as income from other sources and gets a smaller, separate deduction.

What is the deduction on family pension?

The lower of ₹25,000 in the new regime, ₹15,000 in the old, or one third of the pension received. Because of the one-third test, the cap only binds once the pension exceeds ₹75,000 a year in the new regime or ₹45,000 in the old — below that you get a third of whatever you received. It sits under Section 57(iia) rather than Section 16, because family pension is income from other sources and not salary at all. The cap rose from ₹15,000 to ₹25,000 for the new regime in 2024.

I changed jobs this year. Can I claim it twice?

No, and this is the commonest way people end up owing tax on assessment. The deduction is once per person per year, not once per employer. If you joined a new employer mid-year and did not give them your previous salary details, they will have computed TDS from scratch and applied the full deduction again — so between them your two employers have given you ₹1,50,000 of relief where you were entitled to ₹75,000. Submit Form 12B to the new employer so they compute on the combined figure.

Why is ₹12.75 lakh described as tax free?

Because it is the rebate ceiling plus this deduction. Section 87A wipes out the tax on taxable income up to ₹12,00,000 in the new regime, and the standard deduction removes ₹75,000 from salary before taxable income is computed — so a salary of ₹12,75,000 produces exactly ₹12,00,000 of taxable income and no tax at all. It only works for salary, because only salary gets the standard deduction. Someone with ₹12,75,000 of business income has ₹12,75,000 of taxable income and does pay.

What if my salary is less than the deduction?

The deduction is capped at the salary, so it reduces your taxable salary to nil and no further. Someone with ₹40,000 of salary gets ₹40,000 of deduction rather than ₹75,000 — you cannot use it to manufacture a loss and set that against other income. This matters for part-year employees, interns and anyone with a small salary alongside substantial income from another head, where the temptation is to assume the full amount is available.

What are the other deductions under Section 16?

Two, and neither survives the new regime. Entertainment allowance under Section 16(ii) is confined to government employees and capped at the lower of ₹5,000, a fifth of salary excluding allowances, or the allowance actually received. Professional tax under Section 16(iii) is the state levy, deductible in the year it is actually paid and capped at ₹2,500 a year by Article 276. Both are old-regime only, which is why the new regime is so much simpler and so much less generous on everything except this deduction.

How much tax does the standard deduction actually save?

Anywhere from nothing to about ₹74,100, depending entirely on where your salary sits. At the 30% slab it saves roughly ₹23,400 including cess; at 20%, ₹15,600; at 5%, ₹3,900. Below the rebate threshold it saves nothing, because there was no tax to remove. And at exactly ₹12,75,000 it saves ₹74,100, because that is where it carries you under the rebate ceiling — very nearly the whole face value of the deduction, and three times what it is worth to a much higher earner.

Has the standard deduction always existed?

No, it was withdrawn for thirteen years. It existed until FY 2004-05, was removed in 2005 in favour of transport and medical allowances, and was reintroduced at ₹40,000 in FY 2018-19 when those two allowances were withdrawn again. The reintroduction was close to neutral, since the ₹40,000 replaced ₹19,200 of transport allowance and ₹15,000 of medical reimbursement — a net gain of about ₹5,800. It rose to ₹50,000 in FY 2019-20, reached the new regime in FY 2023-24, and was raised to ₹75,000 there in FY 2024-25.

India Standard Deduction Calculator

The standard deduction is the simplest thing in Indian income tax and the only one that requires nothing of you at all. No bills, no receipts, no investment, no declaration. It is ₹75,000 in the new regime and ₹50,000 in the old, and your employer applies it whether you ask or not. What is worth kn...

YOUR SALARY

FINANCIAL YEAR

Under the Income-tax Act, 2025 the salary deduction sits at Section 19 and the family pension one at Section 93. The renumbering is recent, so confirm the section against your Form 130 before quoting it.

GROSS SALARY OR PENSION (₹)

₹12.75 lakh

FAMILY PENSION RECEIVED (₹) — LEAVE AT ZERO IF NONE

YOUR STANDARD DEDUCTION

₹75,000

In the new regime, which is the cheaper of the two for you. It saves you ₹74,100 of tax.

TAX SAVED

₹74,100

NEW REGIME

₹0

OLD REGIME

₹1,86,420

You are inside the tax-free band. The ₹75,000 deduction takes ₹12,75,000 down to ₹12,00,000, and the rebate covers everything up to ₹12,00,000 of taxable income. That is why ₹12,75,000 of salary is the widely quoted tax-free figure — it is the ₹12 lakh ceiling plus this deduction.

Gross salary or pension

₹12,75,000

Family pension

—

Standard deduction, new

₹75,000

Standard deduction, old

₹50,000

Family pension deduction, new

—

Family pension deduction, old

—

Entertainment allowance

—

Professional tax

₹2,500

Taxable, new regime

₹12,00,000

Taxable, old regime

₹12,22,500

Tax, new regime

₹0

Tax, old regime

₹1,86,420

This is an estimate, not tax advice. The regime comparison here counts only the Section 16 deductions — it does not include 80C, 80D, HRA or home loan interest, all of which favour the old regime and none of which are modelled on this page. Use the Section 123 calculator for a fuller comparison before choosing a regime.

THE DEDUCTION

The deduction is larger in the regime that allows least else. The new regime gives ₹75,000 against the old regime's ₹50,000, which was deliberate — it was raised in 2024 to make the new regime more attractive while everything else was stripped out. So the headline deduction is bigger there, but it is nearly all you get.

Live calculation · updates as you type

Created with❤️byeaglecalculator.com

HOW TO USE

1
Enter your gross salary or pension. The deduction is a flat sum rather than a percentage, so it does not scale with the package — but what it saves you very much does.
2
Add family pension separately if you receive any. It is a different head of income with its own smaller deduction, and adding it to salary would overstate the relief.
3
Flag it if you had more than one employer this year. Both will have applied the deduction in computing TDS, and only one of them was entitled to.
4
Read the curve on the right rather than just the headline. It shows what the deduction is actually worth across the salary range, and the spike at the rebate ceiling is the part worth seeing.

HOW IT GREW

Period	Old regime	New regime	What changed
Up to FY 2004-05	₹30,000 tapered	—	The original deduction, withdrawn in 2005
FY 2005-06 to 2017-18	None	—	Replaced by transport and medical allowances
FY 2018-19	₹40,000	—	Reintroduced, replacing those two allowances
FY 2019-20 to 2022-23	₹50,000	—	Raised to ₹50,000
FY 2023-24	₹50,000	₹50,000	Extended to the new regime for the first time
FY 2024-25 onwards	₹50,000	₹75,000	Raised for the new regime only

The 2018 reintroduction was close to neutral, because the ₹40,000 replaced a ₹19,200 transport allowance and a ₹15,000 medical reimbursement that were withdrawn at the same time — a net gain of about ₹5,800. The 2024 increase to ₹75,000 was the first substantial one, and it went only to the new regime.

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Last updated: 30 July 2026 · Verified against CBDT material and the Income-tax Act, 2025 · Estimate only, not tax advice.