The Easiest Tax Benefit You'll Ever Claim
The standard deduction is the simplest tax benefit available to salaried employees and pensioners. You don't need to make investments, submit rent receipts, or keep track of medical bills to claim it. It is a flat amount subtracted directly from your gross salary, reducing your taxable income.
However, the rules and amounts differ depending on which tax regime you choose for Assessment Year (AY) 2026-27.
Standard Deduction in the New Tax Regime
To make the new tax regime more attractive, the government recently increased the standard deduction for those who opt for it.
- Amount: ₹75,000
- Eligibility: All salaried employees and pensioners opting for the new regime.
- Impact: If your salary is ₹10 lakhs, your taxable salary automatically becomes ₹9.25 lakhs before applying the tax slabs.
This increased deduction is a major reason why the new regime is now the default and often the better choice for taxpayers with fewer investments.
Standard Deduction in the Old Tax Regime
If you stick with the old tax regime to claim benefits like 80C, HRA, and home loan interest, the standard deduction remains unchanged.
- Amount: ₹50,000
- Eligibility: All salaried employees and pensioners opting for the old regime.
New vs old at a glance
The standard deduction is a flat amount cut from your salary with no bills required. The new regime gives a bigger one to make up for the deductions it removes.
| Regime | Standard deduction | Tax on Rs 10L salary base after it |
|---|---|---|
| New regime | Rs 75,000 | Applied to Rs 9,25,000 |
| Old regime | Rs 50,000 | Applied to Rs 9,50,000 |
The new-regime standard deduction was raised to Rs 75,000 for AY 2026-27, while the old regime stays at Rs 50,000. Source: Finance Act 2024, Section 16(ia).
How to Claim It
You don't have to do much!
If you receive a Form 16, your employer has already subtracted the standard deduction under Section 16(ia) in Part B.
When you file your ITR on the government portal, the system automatically applies the correct standard deduction based on the regime you select. You just need to verify that it has been applied.
A Quick Note on Multiple Employers If you switched jobs and have salary income from two employers during the year, **you cannot claim the standard deduction twice**. The maximum deduction allowed for the entire financial year is ₹75,000 (new regime) or ₹50,000 (old regime), regardless of how many companies you worked for.
What you should do
- Confirm which regime you are filing under so you apply the right amount
- Check that your Form 16 already shows the deduction under Section 16(ia)
- If you had multiple employers, make sure the deduction appears only once in total
Common mistake
Adding the standard deduction to each employer's salary separately. It is a once-a-year benefit, so a double claim inflates your refund and invites a correction notice.
When you upload your Form 16s to LastMinute ITR, our system automatically caps the standard deduction correctly, ensuring you don't make a calculation error that could lead to a tax notice.