Salaried? Know how much standard deduction you can claim in ITR 2025, 2026-2027

"Though the exemption excludes special incomes like short-term capital gains, this correction restores clarity and ensures that the relief is available up to the income of ₹12.75 lakh, ” said Abhishek Soni, CEO & Co-founder of Tax2win.

While presenting Union Budget 2024, Finance Minister Nirmala Sitharaman announced an increase in the standard deduction for salaried employees from ₹50,000 to ₹75,000, only under the new tax regime. Under the old tax regime, the deduction remained at ₹50,000.

However, this was legally clarified via amendment and the New Income Tax Bill, which was passed on 11 August 2025 in the Lok Sabha, which will be effective from FY 2026–27 (AY 2026–27)

The Taxation Laws (Amendment) Bill, 2025 introduced a provision to Section 16(ia), explicitly substituting “₹50,000” with “₹75,000” for taxpayers under clause (ii) of Section 115BAC(1A) — i.e., the new regime

How much standard deduction you can claim in ITR 2025

While filing ITR for FY 2025–26, taxpayers opting for the new tax regime can claim a standard deduction of ₹75,000, whereas those choosing the old regime are eligible for ₹50,000.

What is standard deduction?

All salaried employees are eligible for the standard deduction, regardless of their salary amount.

The standard deduction for salaried individuals is ₹75,000 in the new regime, while for family pensioners the limit is ₹25,000.

While under the old tax regime, it is ₹50,000

Old tax regime vs new tax regime

Tax rates and deductions are the primary areas where the old and new tax regimes differ. For those taxpayers who make use of these perks, the old tax regime's higher tax rates and numerous exemptions and deductions, such as 80C, HRA, and home loan interest, are better.

The new tax regime is easier to file, with a greater standard deduction of ₹75,000, lower tax rates, and excludes the majority of deductions.

Additionally, under the new regime, the tax refund maximum is larger (up to ₹7 lakh income as opposed to ₹5 lakh under the previous regime).