Standard Deduction ₹75,000: What It Means for You#
What is Standard Deduction?#
Flat deduction from gross salary income.
Current Limit (FY 2026-27)#
- ₹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 before rebate | ₹1,02,500 | ₹32,500 |
| Section 156 Rebate | Not applicable (taxable exceeds ₹5L old-regime ceiling) | ₹32,500 (taxable is within the ₹12L new-regime ceiling) |
| Surcharge | - | - |
| Cess | ₹4,100 | ₹0 |
| Total | ₹1,06,600 | ₹0 |
New Regime saves the full ₹1,06,600 at this income level — the ₹75,000 standard deduction isn't the only reason; the ₹12 lakh Section 156 rebate ceiling is what brings it to zero.
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.