Standard Deduction FY 2025-26 & FY 2026-27: ₹75,000 (New Regime) vs ₹50,000 (Old)
Last verified: June 2026, against the Income Tax Act provisions and Budget 2025 announcements cited below. Figures apply to FY 2025-26 (AY 2026-27). This is general information, not personal tax advice.
The standard deduction is the simplest tax break a salaried person or pensioner gets: a flat amount cut from your salary income with no bills, no proof and no investment required. For FY 2025-26 it is ₹75,000 under the new regime and ₹50,000 under the old regime. Here is how it works and who can claim it.
How much you can claim
| Regime | Standard deduction (FY 2025-26) |
|---|---|
| New regime (default) | ₹75,000 |
| Old regime | ₹50,000 |
The higher ₹75,000 figure under the new regime was introduced in Budget 2024 and continues for FY 2025-26. It is one reason the new regime is now the better choice for most pure-salary earners.
Who can claim it
The standard deduction is available to anyone with income under the head “Salaries” — that means salaried employees and also pensioners, because pension from a former employer is taxed as salary. You do not need to spend or invest anything; it is applied automatically against your salary.
It does not apply to every kind of income
The deduction is only against salary/pension. It is not available against business or professional income, rental income, capital gains, or interest income. A freelancer with no salary cannot claim it (but may use presumptive taxation instead).
Why it makes ₹12.75 lakh tax-free for the salaried
Under the new regime, income up to ₹12 lakh is tax-free via the Section 87A rebate. Add the ₹75,000 standard deduction and a salaried person earning up to ₹12.75 lakh gross pays no tax: ₹12.75 lakh minus ₹75,000 = ₹12 lakh taxable, which the rebate covers.
Family pension: a separate, smaller deduction
If you receive a family pension (pension paid to a dependant after the pensioner’s death), it is taxed under “Income from other sources”, not salary. You get a deduction of one-third of the pension, capped at ₹25,000 (new regime) or ₹15,000 (old regime) — not the ₹75,000/₹50,000 salary standard deduction.
Worked example
Gross salary ₹14,00,000, new regime. Less standard deduction ₹75,000 = ₹13,25,000 taxable. You can also compare your in-hand using our salary calculator and total tax with the income tax calculator.
FY 2026-27: no change
Budget 2026 kept the standard deduction at ₹75,000 in the new regime and ₹50,000 in the old regime for FY 2026-27, along with the family pension deduction of ₹25,000 (new) and ₹15,000 (old).
Second example: two employers in one year
If you change jobs mid-year, both employers may give you the standard deduction while computing TDS. In your return you can claim it only once — ₹75,000 in total under the new regime. Declare your previous employer’s salary to the new employer (using Form 12B) to avoid a surprise tax bill at filing time.
Pensioners
Pension from a former employer is taxed as salary, so the standard deduction applies. Family pension received by a spouse or heir is taxed as “other income” and gets only the separate family pension deduction. Senior citizens can also review senior citizen tax benefits.
What changes under the Income-tax Act, 2025
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. Returns for FY 2025-26 (AY 2026-27) are still filed under the old Act, old section numbers and old forms. From tax year 2026-27 onwards, section numbers and many form numbers change — for example, Form 16 becomes Form 130, Forms 15G/15H merge into Form 121, Form 26QB becomes part of Form 141 and Form 10E becomes Form 39. The underlying rules discussed here were largely carried over; only the references change.
FAQs
Is the standard deduction the same for FY 2026-27?
Yes — ₹75,000 under the new regime and ₹50,000 under the old regime.
Do I need to submit any proof for the standard deduction?
No. It is a flat deduction applied automatically against salary or pension income — no bills or declarations needed.
Can pensioners claim ₹75,000?
Yes, if they opt for the new regime, because pension from a former employer is taxed as salary. Family pension is different and gets a smaller deduction.
Can I claim it under both regimes?
You claim it under whichever single regime you choose for the year — ₹75,000 if new, ₹50,000 if old.
Does a freelancer get the standard deduction?
No. It applies only to salary/pension income, not business or professional income.
