The standard deduction is a flat amount subtracted from your salary income before tax is calculated, with no bills, proofs or conditions. Every salaried person and every pensioner gets it automatically. It replaced the older, fiddlier transport allowance and medical reimbursement exemptions with a single number.

The amounts

The standard deduction is available in both the old and the new tax regime, but the amount differs. For the old regime it has been Rs 50,000. For the new regime it was raised to Rs 75,000 from FY 2024-25 onwards. Because these figures are set by the annual Finance Act and have changed more than once in recent years, check the amount for the current year before relying on it.

For example, on a gross salary of Rs 10,00,000 with no other deductions, the new regime taxes Rs 9,25,000 after a Rs 75,000 standard deduction. It is worth roughly Rs 15,000 to Rs 22,500 in tax for a middle-income earner, depending on the slab it falls in.

Family pension

Recipients of a family pension get a smaller standard deduction: one-third of the pension subject to a cap, with the cap set higher under the new regime. This is a separate limb of the same section and does not apply to your own salary.

Frequently asked questions

Do I need to claim the standard deduction, or is it automatic?

The employer applies it automatically in your TDS computation, and it is pre-filled when you file your return. You do not claim it separately.

Can both a salary and a pension get the standard deduction?

You get one standard deduction against salary or pension income in a year, not one for each source.

Is the standard deduction the same as Section 80C?

No. The standard deduction is a flat cut from salary with no investment needed. Section 80C is a separate Rs 1.5 lakh deduction that requires specified investments or payments.

See it applied in a full calculation with the Income Tax Calculator, and check how it affects monthly deduction in the TDS on Salary Calculator.