Standard Deduction Rs 75,000 for Salaried Under New Tax Regime
If you are a salaried employee, the standard deduction is one of the few benefits available under the new tax regime. For FY 2025-26, the standard deduction under the new regime is Rs 75,000 — up from Rs 50,000 in FY 2023-24.
WHAT IS STANDARD DEDUCTION
Standard deduction is a flat deduction from your gross salary income. You do not need to show any proof of expenditure or investment to claim it. It is automatically available to every salaried taxpayer and pension recipients while computing taxable income.
HOW MUCH IS THE STANDARD DEDUCTION
Under the new tax regime (Section 115BAC): Rs 75,000 for FY 2025-26.
Under the old tax regime: Rs 50,000 (unchanged).
The increase from Rs 50,000 to Rs 75,000 under the new regime was announced in Budget 2024 (Finance Act No. 2, 2024) and applies from FY 2024-25 onwards.
IMPACT ON TAX-FREE INCOME
Budget 2025 made income up to Rs 12 lakh tax-free under the new regime through an enhanced Section 87A rebate of Rs 60,000. When you add the Rs 75,000 standard deduction on top, salaried employees with gross income up to Rs 12,75,000 pay zero income tax under the new regime.
WHO CAN CLAIM IT
Standard deduction is available to:
- Salaried employees (income under the head Salaries)
- Pensioners (pension taxed as Salary)
It is NOT available to:
- Freelancers and self-employed professionals (they claim expenses directly)
- Business owners (they have separate deduction provisions)
NEW REGIME IS NOW THE DEFAULT
The new tax regime under Section 115BAC has been the default regime since AY 2024-25 (FY 2023-24). If you do not specifically opt out, you are automatically taxed under the new regime. Salaried employees can switch between old and new regime each year at the time of filing their ITR.
PRACTICAL TIP
If your only significant deduction is the standard deduction and you do not have large investments under Section 80C, home loan interest, or HRA claims, the new regime with its lower slab rates and Rs 75,000 standard deduction will almost certainly give you lower tax than the old regime. Run the numbers for your specific salary before choosing.
WHAT IS STANDARD DEDUCTION
Standard deduction is a flat deduction from your gross salary income. You do not need to show any proof of expenditure or investment to claim it. It is automatically available to every salaried taxpayer and pension recipients while computing taxable income.
HOW MUCH IS THE STANDARD DEDUCTION
Under the new tax regime (Section 115BAC): Rs 75,000 for FY 2025-26.
Under the old tax regime: Rs 50,000 (unchanged).
The increase from Rs 50,000 to Rs 75,000 under the new regime was announced in Budget 2024 (Finance Act No. 2, 2024) and applies from FY 2024-25 onwards.
IMPACT ON TAX-FREE INCOME
Budget 2025 made income up to Rs 12 lakh tax-free under the new regime through an enhanced Section 87A rebate of Rs 60,000. When you add the Rs 75,000 standard deduction on top, salaried employees with gross income up to Rs 12,75,000 pay zero income tax under the new regime.
WHO CAN CLAIM IT
Standard deduction is available to:
- Salaried employees (income under the head Salaries)
- Pensioners (pension taxed as Salary)
It is NOT available to:
- Freelancers and self-employed professionals (they claim expenses directly)
- Business owners (they have separate deduction provisions)
NEW REGIME IS NOW THE DEFAULT
The new tax regime under Section 115BAC has been the default regime since AY 2024-25 (FY 2023-24). If you do not specifically opt out, you are automatically taxed under the new regime. Salaried employees can switch between old and new regime each year at the time of filing their ITR.
PRACTICAL TIP
If your only significant deduction is the standard deduction and you do not have large investments under Section 80C, home loan interest, or HRA claims, the new regime with its lower slab rates and Rs 75,000 standard deduction will almost certainly give you lower tax than the old regime. Run the numbers for your specific salary before choosing.
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Disclaimer: This content is the author's personal opinion and analysis. It does not constitute professional tax or legal advice. Consult a qualified professional for specific advice on your situation.
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