What Is Standard Deduction?
Standard deduction is a flat amount subtracted from your salary (or pension) income before your tax is calculated, with no bills or proof required. It reduces your taxable income automatically, and it is available under both the old and the new tax regimes, making it one of the simplest tax benefits for salaried people.
Why the standard deduction matters
Standard deduction is a rare tax break that requires zero effort — no receipts, no planning, no investments. It simply lowers your taxable salary, reducing your income tax automatically.
It also matters in the old vs new regime choice: because the new regime offers a higher standard deduction, it strengthens the case for the new regime for many salaried taxpayers who claim few other deductions.
How the standard deduction works
When your tax is computed, a flat standard deduction is subtracted from your gross salary income before applying the slab rates. You do not need to submit any proof or make any investment to claim it. The amount is ₹50,000 under the old regime and ₹75,000 under the new regime (from FY 2024-25). Pensioners can also claim it against pension income. Because the figure is set in the Budget, confirm the current year’s amount when you file.
A real Indian example of the standard deduction
Under the new regime, Rohit’s gross salary income is ₹10,00,000. A standard deduction of ₹75,000 is subtracted automatically, so his taxable income becomes ₹9,25,000 before slab rates apply — with no receipts or effort on his part. In the 20% marginal band, that flat deduction saves him around ₹15,000 in tax, simply for being a salaried employee.
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Standard deduction by regime
| Old regime | New regime | |
|---|---|---|
| Amount | ₹50,000 | ₹75,000 (FY 2024-25 on) |
| Proof needed | None | None |
| Other deductions | Many (80C, 80D, HRA) | Almost none |
| Applies to | Salary & pension | Salary & pension |
Frequently asked questions about the standard deduction
What is the standard deduction amount?
It is ₹50,000 under the old regime and ₹75,000 under the new regime (from FY 2024-25). The figure is set in the Union Budget, so confirm the current year’s amount when filing.
Is standard deduction available in the new tax regime?
Yes — and at a higher amount (₹75,000). Unlike most deductions, the standard deduction applies under both the old and the new regimes, which is one reason the new regime appeals to many salaried taxpayers.
Do I need proof to claim standard deduction?
No. It is a flat amount subtracted automatically from salary or pension income, with no bills, receipts or investments required. That simplicity is what makes it so useful.
Who can claim the standard deduction?
Salaried employees and pensioners. It is applied against salary or pension income before slab rates, reducing your taxable income regardless of your other deductions.
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How BudgetAnalyzer uses this
BudgetAnalyzer helps you keep your income and tax-relevant details organised, so when you compare tax regimes the standard deduction and everything else is based on your real numbers.
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