Standard Deduction 2026: ₹75,000 New Regime vs ₹50,000 Old Regime — What Salaried Employees and Pensioners Actually Get

By Nitish Bharadwaj · Published Jul 19, 2026 · 6 min

The standard deduction is a flat, no-proof-required deduction from salary or pension income, and for FY 2025-26 (AY 2026-27) it differs sharply by regime: ₹75,000 under the new regime versus ₹50,000 under the old regime. It applies only to salaried employees and regular pensioners — family pensioners get a separate, smaller deduction of ₹25,000 (new regime) or ₹15,000 (old regime), or one-third of the pension, whichever is lower. This guide covers who qualifies, how the deduction stacks with 80C, 80D, and NPS benefits, and how it shifts the old-vs-new regime decision for salaried taxpayers.

Every salaried employee and pensioner in India gets a standard deduction against their income — no bills, no proof, no conditions. But the amount you get depends entirely on which regime you pick: ₹75,000 under the new regime, just ₹50,000 under the old one, and a different, smaller figure again if you're a family pensioner.

The Two Numbers for FY 2025-26 (AY 2026-27)

For the return you're filing this season, the old tax regime carries a standard deduction of ₹50,000, a figure unchanged since it was raised from ₹40,000 in the 2019 interim budget. The new regime carries a standard deduction of ₹75,000, raised from ₹50,000 in Budget 2024 and continuing unchanged for FY 2025-26. Both are flat deductions, subtracted directly from your gross salary or pension before any tax slab is applied — you don't need to submit a single receipt, bill, or declaration to claim either amount.

Who Actually Qualifies — and Who Doesn't

The standard deduction is available only against income taxed under the 'Salaries' head — that covers salaried employees and pensioners drawing their own retirement pension, since pension received by the original employee is treated as salary income for this purpose. It is not available against business or professional income, and someone with no salary or pension income simply has nothing to apply it to. The deduction is flat and automatic: it doesn't matter whether your actual work-related expenses were ₹5,000 or ₹5 lakh, the same ₹50,000 or ₹75,000 applies.

Family Pension Gets a Smaller, Separate Number

This is where the confusion usually starts. A family pension — paid to a spouse or dependent after the original pensioner's death — is taxed under 'Income from Other Sources,' not 'Salaries,' so it does not get the ₹75,000 or ₹50,000 figure at all. Instead, family pensioners can claim a deduction of ₹25,000 or one-third of the pension, whichever is lower, under the new regime — raised from ₹15,000 in Budget 2025 — while the old regime figure remains ₹15,000 or one-third, whichever is lower. A regular pensioner drawing their own retirement pension is unaffected by this distinction and continues to get the full salaried-employee standard deduction.

How the ₹75,000 Deduction Changes the Regime Math

The new regime's higher standard deduction works alongside its ₹12 lakh Section 87A rebate threshold — our Section 87A rebate guide covers exactly which income qualifies for that rebate and which special-rate gains it excludes. For a purely salaried taxpayer with limited 80C, 80D, or HRA claims, the ₹75,000 standard deduction plus the rebate can mean close to zero tax liability up to a gross salary in the ₹12.75 lakh range. Anyone with substantial deductions to claim under the old regime — large HRA, an active home loan under Section 24 and 80C, or NPS employer contributions under Section 80CCD(2) — still needs to run the full comparison rather than assuming the new regime's higher standard deduction alone tips the scale; our complete old vs new regime guide for salaried taxpayers walks through that full calculation.

Does It Stack With 80C, 80D, HRA, or NPS 80CCD(2)?

Yes. The standard deduction is entirely separate from — and applied before — any other deduction or exemption. Under the old regime, it sits alongside Section 80C, 80D, and HRA claims; under the new regime, where most exemptions aren't available, it still stacks with the employer's NPS contribution deduction under Section 80CCD(2), which remains one of the few deductions the new regime permits. In both cases, the standard deduction is subtracted from gross salary first, and every other applicable deduction is then applied to what's left.