Standard Deduction in FY 2026-27: ₹75,000 vs ₹50,000 Explained
Reviewed on June 28, 2026 • Author: Upaman Research Team • Reviewer: Tax Policy Review Desk
The standard deduction is the simplest tax benefit a salaried person gets: a flat amount knocked off your salary income before tax is calculated, with no bills, receipts, or investments required. For FY 2026-27 it is ₹75,000 under the new regime and ₹50,000 under the old regime.
New vs old regime at a glance
| Feature | New regime | Old regime |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Proof required | None | None |
| Available to pensioners | Yes | Yes |
| Other deductions (80C, HRA, etc.) | Mostly not allowed | Allowed |
The extra ₹25,000 in the new regime is one reason it has become the default choice for most salaried taxpayers — you get a bigger flat deduction and lower slab rates, without having to lock money into tax-saving investments.
Who can claim it
- Salaried employees — claimed automatically by employers in TDS calculations.
- Pensioners — pension is taxed as salary, so the standard deduction applies.
- Family pension recipients get a separate, smaller standard deduction (a fixed amount or a portion of the pension, whichever is lower) rather than the salaried figure.
Business and professional income does not get the salary standard deduction — it is specifically for salary and pension.
What it actually saves you
The cash benefit equals the deduction multiplied by your marginal tax rate. In the new regime, ₹75,000 off your taxable income saves:
| Your marginal rate | Tax saved by ₹75,000 deduction |
|---|---|
| 5% | ₹3,750 |
| 10% | ₹7,500 |
| 20% | ₹15,000 |
| 30% | ₹22,500 |
Add the 4% health and education cess and the benefit is slightly higher again. For someone in the 30% band the standard deduction alone is worth about ₹23,400 a year — for doing nothing.
Why ₹75,000 matters at the ₹12 lakh threshold
The standard deduction is also what pushes the new regime’s zero-tax point from ₹12 lakh of taxable income to ₹12.75 lakh of salary. Because ₹75,000 comes off first, a ₹12.75 lakh salary becomes ₹12 lakh taxable, which the Section 87A rebate then reduces to ₹0. We walk through that in tax on a ₹12 lakh salary.
See it in your numbers
The Income Tax Calculator applies the correct standard deduction for each regime, and the Salary Calculator shows the effect on monthly take-home. To choose a regime, see the breakeven guide and the full FY 2026-27 slabs guide.
General information for planning, not tax advice. Eligibility for the family-pension deduction and special cases vary; confirm on the Income Tax Department portal.