Standard Deduction on Salary and Pension Income – myITreturn Help Center

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The standard deduction is a fixed deduction from income taxable under the head “Salaries.” It is available without submitting bills or proving employment-related expenditure.

Deduction Amount for AY 2026-27

Tax regime	Maximum deduction
Old tax regime	₹50,000 or salary income, whichever is lower
Default new tax regime under section 115BAC(1A)	₹75,000 or salary income, whichever is lower

Who Can Claim It?

Salaried employees.
Retired employees receiving pension from a former employer.
A person receiving salary from more than one employer, subject to one aggregate annual deduction.

One deduction per taxpayer: The limit does not multiply because a person changed jobs, had two employers or received salary and own pension from different sources.

Who Cannot Claim Salary Standard Deduction?

A recipient of family pension, because it is taxable under income from other sources.
A person receiving only NPS or insurance annuity not taxable as salary.
A freelancer, consultant, partner or business owner merely because regular payments are received.

Separate Deduction for Family Pension

Family pension has its own deduction under section 57:

Old regime: Lower of one-third of family pension or ₹15,000.
New regime: Lower of one-third of family pension or ₹25,000.

Classification matters: Pension paid to the retired employee by a former employer is salary pension. Pension paid to a family member after the employee’s death is family pension.

Examples

Example 1: Salary income is ₹6,00,000 under the new regime. Standard deduction is ₹75,000. Taxable salary before other eligible deductions is ₹5,25,000.

Example 2: Salary from Employer A is ₹3,00,000 and Employer B is ₹4,00,000. The new-regime deduction remains ₹75,000 in total, not ₹1,50,000.

Example 3: Own pension is ₹60,000 under the old regime. Deduction is limited to ₹50,000, leaving taxable salary pension of ₹10,000.

How to Claim in the ITR

Report gross salary and pension from all employers or former employers.
Verify the amount with Form 16, AIS and Form 26AS.
Select the correct tax regime.
Review the standard deduction automatically computed in the salary schedule.
Report family pension separately under income from other sources.

No expense proof required: The deduction is statutory. However, retain Form 16 and pension records to support the underlying salary income.

Income-tax Act, 2025

For tax year 2026-27, section 19 of the Income-tax Act, 2025 continues the ₹50,000 normal-regime and ₹75,000 new-regime salary deductions. Section 93 contains the corresponding family-pension deduction. AY 2026-27 itself remains governed by the 1961 Act.

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