Standard Deduction for Salaried Individuals in New & Old Tax Regime
The Income Tax Act not only provides provisions for imposing taxes on the income of citizens but also offers number of ways through which one can claim deductions and rebates. The deductions are allowed based on the way the taxpayers spend their income.
One such deduction offered to salaried individuals is the standard deduction. You must know that salaried individuals and pensioners can claim a certain amount under standard deduction by default without any investment or spending of money by the taxpayers. The provision was taken down for a number of years and was re-introduced during the Budget announcement in 2018.
What is Standard Deduction?
The standard deduction is a fixed amount that taxpayers can subtract from their gross income to reduce their taxable income. It is available to salaried individuals and pensioners without requiring proof or documentation.
Standard Deduction under New & Old Tax Regime
The standard deduction available for salaried individuals under both the regimes for the FY 2024-25 (AY 2025-26) is as follows:
- Old Tax Regime: Rs. 50,000
- New Tax Regime: Rs. 75,000
Purpose of Standard Deduction
The introduction of standard deduction aims to achieve the following:
- Simplify tax filing by reducing paperwork and enabling deductions regardless of actual expenses.
- Offer tax relief specifically to middle-class salaried individuals.
- Extend benefits to pensioners through the standard deduction.
Benefits of Standard Deduction
The standard deduction is a fixed amount available to salaried individuals, directly reducing taxable income and, in turn, lowering their tax liability and overall tax burden.
- Reduction of tax liability: The standard deduction is a flat deduction that helps in reducing the taxable income, resulting in reduction of tax liability.
- Simplification of ITR filing: There is no need to maintain any documents or proofs to claim standard deduction making it easier to file the income tax return while claiming standard deduction.
- No Conditions Attached: The standard deduction is available to all salaried individuals, without any conditions.
Documents Required for Standard Deduction
No supporting documents are required to claim the standard deduction for salary income. However, for filing income tax returns, you will need to provide the following documents and complete the necessary forms:
- Bank statements for the relevant financial year.
- Income statements from interest or fixed deposits.
- TDS (Tax Deducted at Source) certificates.
- Investment documents.
- Form 26AS and Form AIS.
Related Articles
Calculate taxes- Income Tax Calculator – FY 2024-2025, AY 2025-2026
Income Tax Slabs 2025 & Tax Rates for FY 2024-25
Income Tax in India : Basics, slabs and E-filing Process 2024-2025
New Income Tax Portal – Intro & Key Features of the e-Filing Portal
Frequently Asked Questions
About the Author
CA Mohammed S Chokhawala
I'm a chartered accountant, well-versed in the ins and outs of income tax, GST, and keeping the books balanced. Numbers are my thing, I can sift through financial statements and tax codes with the best of them. But there's another side to me – a side that thrives on words, not figures. Read more
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.
Cleartax is a product by Defmacro Software Pvt. Ltd.
ISO 27001
Data Center
SSL Certified Site
128-bit encryption