Standard Deduction
A flat deduction from salary income, available without needing bills or proof, currently ₹75,000 under the new regime and ₹50,000 under the old regime.
The standard deduction is a fixed amount subtracted from gross salary before tax is calculated, available automatically to salaried taxpayers and pensioners without needing to submit any bills, receipts, or proof of expense. It exists as a simplified stand-in for the actual work-related expenses employees incur, which unlike a business, they generally can't claim individually against salary income.
The amount differs by regime: ₹75,000 under the new tax regime and ₹50,000 under the old regime, for FY 2025-26, following successive increases in recent budgets. Since it applies automatically to salary income, and pension, treated similarly, most salaried taxpayers don't need to do anything special to claim it, it's already reflected in Form 16 and pre-filled return data.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.