Standard deduction for salaried people and pensioners: ₹75,000 or ₹50,000, who gets it and how much it saves
The standard deduction is a flat amount taken off your salary or pension before tax — no bills or proof needed. It is ₹75,000 in the new tax regime and ₹50,000 in the old regime (or your salary, if that is lower). From Tax Year 2026-27 it sits in section 19 of the Income-tax Act, 2025 (it was section 16(ia) of the 1961 Act); the amounts are unchanged. Pensioners get it on pension from a former employer. Family pension gets a separate deduction: one-third or ₹25,000 (new) / ₹15,000 (old), whichever is less. In the new regime, the ₹75,000 is why salary up to ₹12.75 lakh is tax-free.
Key facts Last verified: 30 Sep 2026
| Item | Details | Source |
|---|---|---|
| New regime | ₹75,000 or the salary, whichever is less (tax computed under section 202(1)) | Income-tax Act, 2025 — section 19 |
| Old regime | ₹50,000 or the salary, whichever is less | Income-tax Act, 2025 — section 19 |
| Who gets it | All employees with salary income, including retired employees drawing pension; no proof needed | Income Tax Department |
| Family pension | One-third or ₹25,000 (new regime) / ₹15,000 (old regime), whichever is less | Income-tax Act, 2025 — section 93(1)(d) |
| Professional tax | Deductible in the old regime; not allowed in the new regime (section 202(2)) | Income-tax Act, 2025 |
| Old section number | Section 16(ia) of the Income-tax Act, 1961 — still used for FY 2025-26 returns | Income Tax Department |
Most tax deductions need proof: an LIC receipt, a rent slip, a loan certificate. The standard deduction needs nothing. If you earn a salary or a pension from a former employer, a fixed amount is simply taken off before your tax is worked out. Your employer applies it in your monthly TDS, and it appears in Form 16 and in your ITR automatically.
Standard deduction at a glance
| New regime (default) | Old regime | |
|---|---|---|
| Salary / pension from employer | ₹75,000 | ₹50,000 |
| If salary is below that | Whole salary (deduction can't exceed it) | Whole salary |
| Family pension | ⅓ of it or ₹25,000, whichever is less | ⅓ of it or ₹15,000, whichever is less |
| Professional tax (₹2,500/yr in Maharashtra) | Not deductible | Deductible |
| Proof needed | None | None |
| Law — Tax Year 2026-27 onwards | Income-tax Act, 2025, section 19 (family pension: section 93(1)(d)) | Same |
| Law — FY 2025-26 and earlier | Income-tax Act, 1961, section 16(ia) (family pension: 57(iia)) | Same |
Amounts did not change with the new Act. The Income-tax Act, 2025 applies from 1 April 2026 (Tax Year 2026-27) and mainly renumbered and simplified sections. Budget 2026 kept the ₹75,000 / ₹50,000 amounts. Why the numbers moved: see old vs new section numbers.
Who gets it, and who doesn't
| Person | Standard deduction? |
|---|---|
| Private or government employee | Yes — all employees, whoever the employer |
| Retired employee drawing pension from former employer | Yes — pension is taxed as salary |
| Spouse / family getting family pension after the employee's death | Not the ₹75,000 — gets the separate ⅓ / ₹25,000 deduction instead |
| Two employers in the same year | One deduction in total — the limit is per person per year, not per employer |
| Freelancer / consultant / business income only | No — there's no salary |
| Pensioner who also works | One deduction on total salary + pension, up to the limit |
How much does it actually save?
The deduction lowers your taxable income, so the saving depends on your tax slab. All figures include 4% cess.
| Your situation | Deduction | Tax saved per year |
|---|---|---|
| New regime, salary ₹12,75,000 | ₹75,000 → taxable ₹12,00,000 → rebate makes tax nil | ₹74,100 (tax would have been ₹74,100 without it) |
| New regime, salary ₹20,00,000 (20% slab) | ₹75,000 | ₹15,600 |
| Old regime, 30% slab | ₹50,000 | ₹15,600 |
| Old regime, 20% slab | ₹50,000 | ₹10,400 |
| Salary ₹40,000 for the year (joined in March) | ₹40,000 (limited to salary) | Usually no tax anyway |
Why ₹12.75 lakh is tax-free in the new regime: ₹12,75,000 − ₹75,000 = ₹12,00,000 taxable. Tax on that is ₹60,000, and the section 156 rebate (old 87A) cancels up to ₹60,000 for income up to ₹12 lakh. Check your own figure in the income tax calculator.
Pensioners: pension vs family pension
These two are taxed differently. Mixing them up is a common mistake in ITR.
| Pension (you retired) | Family pension (after spouse/parent died) | |
|---|---|---|
| Taxed as | Salary | Income from other sources |
| Deduction | Standard deduction ₹75,000 (new) / ₹50,000 (old) | ⅓ or ₹25,000 (new) / ₹15,000 (old), whichever is less |
| Example: ₹3,00,000 a year | ₹3,00,000 − ₹75,000 = ₹2,25,000 taxable | ⅓ = ₹1,00,000, capped at ₹25,000 → ₹2,75,000 taxable |
| Example: ₹60,000 a year | ₹60,000 − ₹60,000 = nil | ⅓ = ₹20,000 (below ₹25,000) → ₹40,000 taxable |
A retired person who also gets family pension (for example a widow who has her own pension too) gets both: the standard deduction on her own pension and the family-pension deduction on the other.
How to claim it
- Salaried: do nothing. Your employer deducts it while working out monthly TDS and shows it in Form 16 (Part B).
- Changed jobs this year? Tell the new employer your earlier salary and TDS, so the deduction is not given twice. If it was, your ITR will show extra tax payable.
- In your ITR: the e-filing portal pre-fills the standard deduction under salary. Check it shows ₹75,000 (new) or ₹50,000 (old), matching the regime you choose. See how to file ITR online.
- Family pension: report it under *Income from other sources* and claim the ⅓ / ₹25,000 deduction there, not as standard deduction.
New regime and professional tax: in the new regime you can't deduct the ₹2,500 professional tax. Some payroll software still does, so check Form 16. The ₹75,000 standard deduction is still allowed.
Frequently asked questions
What is the standard deduction for 2026-27?
₹75,000 under the new tax regime and ₹50,000 under the old regime, or the salary if lower. The amounts are the same as last year.
Is standard deduction available in the new tax regime?
Yes. In fact it is higher in the new regime — ₹75,000 against ₹50,000 in the old regime.
Under which section is the standard deduction in the new Income-tax Act, 2025?
Section 19 (Table, serial number 2). In the 1961 Act it was section 16(ia), which still applies to returns for FY 2025-26.
Do pensioners get the standard deduction?
Yes, on pension from a former employer, which is taxed as salary. Family pension is different: it gets one-third or ₹25,000 (new regime) / ₹15,000 (old regime), whichever is less.
Can I claim the standard deduction twice if I had two jobs in a year?
No. The limit applies to your total salary for the year, not to each employer.
Do I need to submit proof for the standard deduction?
No. The Income Tax Department describes it as absolute and unconditional; no supporting evidence is needed.
Is professional tax deductible in the new tax regime?
No. The new regime does not allow the professional tax deduction; the old regime does.
Official links
Use only these government websites. HumainOne is not connected to any of them.
- Income-tax Act, 2025 — section 19 (Deductions from salaries)₹75,000 / ₹50,000, professional tax
- Income Tax Department — Deductions from SalaryWho gets it, no proof needed
- Income-tax Act, 2025 (as amended by Finance Act, 2026)Section 93(1)(d) family pension; section 202 new regime
- Income Tax e-Filing — Salaried individualsWhich ITR form, deductions
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