Tax regimes, slabs and rates · Tax Year 2026-27
Standard deduction for salaried people and pensioners
The standard deduction cuts your taxable salary or pension without any proof. It is ₹50,000 in the old regime and ₹75,000 in the new regime on the 2025-26 rules. Learn who gets it and how it interacts with other deductions.
On this page
The standard deduction is a flat amount taken off your salary or pension before tax is worked out, with no bills or proof. On TaxCare's rules for the tax year 2025-26 it is ₹50,000 in the old regime and ₹75,000 in the new regime. It can never be more than the salary or pension you actually received.
The figures for the tax year 2026-27 are provisional. They carry forward the 2025-26 values and have not been signed off against the Income-tax Act, 2025 or the Finance Act 2026.
Who gets it
It applies to income that is taxed under the head salary. That includes:
- Salary from an employer, private or government.
- Pension received from a former employer.
It does not apply to business or professional income, rent, interest or capital gains.
How much, by regime
Item | Old regime | New regime |
|---|---|---|
Standard deduction on salary or pension | ₹50,000 | ₹75,000 |
Family pension deduction | Lower of one-third and ₹15,000 | Lower of one-third and ₹25,000 |
Entertainment allowance (government employees) | Lower of ₹5,000, one-fifth of salary and the actual amount | Nil |
Professional tax paid | Deductible | Nil |
Under the old regime, the standard deduction, entertainment allowance (for government employees) and professional tax together are called the deductions from salary. They are never allowed to exceed the net salary.
Worked examples
These figures were worked out with TaxCare's tax engine and are the same for the tax years 2025-26 and 2026-27.
Example 1: salary of ₹8,00,000
- Old regime: ₹8,00,000 − ₹50,000 = ₹7,50,000 income from salary, before other deductions.
- New regime: ₹8,00,000 − ₹75,000 = ₹7,25,000 income from salary.
The new regime deduction is ₹25,000 higher. Whether the new regime wins overall depends on your other deductions. See our guide on old vs new regime.
Example 2: pension of ₹30,000 for the year
- The deduction is capped at the pension itself. Old regime: ₹30,000 (not ₹50,000). New regime: ₹30,000 (not ₹75,000).
- Taxable pension income: nil.
Example 3: part-year salary
If you worked for only part of the year, the deduction is not pro-rated. It is the flat amount, limited only by what you earned. A person who earned ₹60,000 in the year deducts ₹50,000 (old, leaving ₹10,000 taxable) or ₹60,000 (new, capped at income).
Family pension: a separate deduction
Family pension is the pension a family member receives after the death of an employee or pensioner. It is taxed under the head income from other sources, and the standard deduction for salary does not apply to it. Instead, a deduction applies: the lower of one-third of the family pension and ₹15,000 under the old regime, or ₹25,000 under the new regime.
Under the Income-tax Act, 1961 this deduction is section 57(iia).
Does it apply with two employers?
Yes, you get it once. If you changed jobs during the year, you claim a single deduction in your return, not one per employer. Your employer may have applied it when deducting TDS. Check your Form 16s together: if each employer allowed it, the return still takes it only once, up to ₹50,000 (old regime) or ₹75,000 (new regime).
Is the standard deduction a reason to choose a regime?
On its own, the higher deduction makes the new regime look better. But the old regime also allows deductions such as 80C, 80D and home loan interest, and the new regime has a rebate that makes tax nil up to ₹12 lakh of taxable income on the 2025-26 rules. Compare both. See our guide on old vs new regime.
What the standard deduction does not do
- It does not need a payslip entry. It is applied at filing, even if your employer left it out.
- It does not reduce income from house property or capital gains.
- It does not apply to income that is not salary or pension.
How TaxCare helps
TaxCare brings in your salary and TDS from the portal, applies the standard deduction for the regime, and shows the tax under both regimes side by side. If your Form 16 shows a different deduction, you will see the difference before you submit. Nothing is filed without your approval.
This guide gives general information and is not professional tax advice.
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