Standard deduction

The standard deduction is a fixed amount subtracted from your salary before tax is calculated, and you do not need to show any bills or proof for it. It is the simplest tax benefit a salaried person gets.

Why it exists

Before this flat deduction, salaried people could claim small work-related expenses with paperwork. The standard deduction replaced that with one no-questions-asked amount, so everyone earning a salary or pension gets the same cut automatically. Your employer applies it when working out the tax to deduct, so you usually do not have to do anything.

How much, and in which regime

For FY2025-26 it is ₹75,000 under the new regime and ₹50,000 under the old, for salaried people and pensioners. Unusually, it is one of the very few benefits that applies in both regimes, which is part of why the new regime can still work out well for a plain salary. The amount can change at any Budget, so confirm the current figure on incometax.gov.in.

Why it matters more than it looks

Because it comes off the top with no effort, the standard deduction quietly raises the salary at which tax begins. Under the new regime for 2026-27, for example, the ₹75,000 deduction is what stretches the tax-free point from ₹12 lakh of taxable income to about ₹12.75 lakh of salary. You can see that effect in the income tax by salary chart and work your own figure in the income tax calculator.