BooksIQSalaried employees and pensioners get a standard deduction from gross salary. Under the NEW tax regime: ₹75,000 (raised from ₹50,000 by Finance Act 2024). Under the OLD regime: ₹50,000.
Key points
- Available to every employee whose income is chargeable under the head 'Salaries' and to pensioners receiving pension chargeable as salary.
- Old regime allowance has been ₹50,000 since AY 2020-21 (raised from ₹40,000).
- Finance Act 2024 raised it to ₹75,000 SPECIFICALLY for taxpayers under the new regime (§115BAC) — old-regime filers continue with ₹50,000.
- No documentation or expense proof needed — it's a flat lump-sum allowance.
- For family pensioners (legal heirs), a separate deduction applies: ₹15,000 (old regime) or ⅓ of pension, whichever is lower;
- ₹25,000 under new regime from FY 2024-25.
Reference: §16(ia), ITA 1961 — under ITA 2025 (FY 26-27 onwards), this is §19
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