Standard Deduction ₹75,000: What It Means for You
What is Standard Deduction?#
Flat deduction from gross salary income.
Current Limit (FY 2025-26)#
- ₹75,000 (New Tax Regime)
- ₹50,000 (Old Tax Regime)
Who Benefits?#
- All salaried employees
- Pensioners
How It Works?#
Example: ₹10 Lakh Income#
| Particulars | Old Regime | New Regime |
|---|---|---|
| Gross Salary | ₹10,00,000 | ₹10,00,000 |
| Standard Deduction | ₹50,000 | ₹75,000 |
| Taxable Income | ₹9,50,000 | ₹9,25,000 |
Tax Comparison#
Old vs New Regime (₹10 Lakh)#
| Tax | Old Regime | New Regime |
|---|---|---|
| Taxable | ₹9,50,000 | ₹9,25,000 |
| Tax | ₹1,12,500 | ₹95,000 |
| Surcharge | - | - |
| Cess | ₹4,500 | ₹3,800 |
| Total | ₹1,17,000 | ₹98,800 |
Savings: ₹18,200
Key Points#
- Automatically applied by employer
- Available in new regime only
- No documents required
- Reduces taxable income
Not Eligible#
- Business income
- Freelancers
- Professionals (unless salary received)
Conclusion#
Standard deduction reduces tax liability significantly.