Is Standard Deduction Applicable in the New Tax Regime for FY 2024–25?
Is Standard Deduction Applicable in the New Tax Regime for FY 2024–25?
Here’s What Salaried Taxpayers Need to Know
One of the most frequently asked tax questions in recent years has been:
"Can I claim the standard deduction under the New Tax Regime?"
The answer is yes, and the update is especially relevant for salaried employees and pensioners who plan to file under the New Tax Regime in FY 2024–25 (AY 2025–26).
Let’s break it down in simple terms.
✅ What Is Standard Deduction?
The standard deduction is a flat deduction allowed from your salary or pension income—no bills or proofs required.
| Financial Year | Deduction Amount |
| FY 2024–25 | ₹50,000 |
This deduction directly reduces your taxable income, resulting in lower tax liability.
✅ Is Standard Deduction Allowed in the New Tax Regime?
Yes.
As per Budget 2023 announcements (and continuing in FY 2024–25), standard deduction of ₹50,000 is now available under the New Tax Regime for:
• Salaried individuals
• Pensioners (including family pension in some cases)
Earlier, standard deduction was only available under the Old Regime, but from FY 2023–24 onwards, it has been extended to the New Regime as well.
🧾 Quick Example
Mr. Arjun, a salaried employee, has a salary income of ₹9,00,000.
Under the New Regime, he can claim:
• Standard Deduction: ₹50,000
• Taxable Income = ₹8,50,000
This helps reduce overall tax liability significantly, especially for those hovering near rebate thresholds (like ₹7 lakh).
✅ Who Can Claim the Standard Deduction in the New Regime?
| Category | Eligible? |
| Salaried Employees | ✅ Yes |
| Pensioners | ✅ Yes |
| Freelancers | ❌ No |
| Business Income | ❌ No |
❓Is the Standard Deduction Automatic?
✅ Yes.
Whether you opt for the New or Old Tax Regime, the standard deduction is automatically calculated when you file your return using Form 16, ITR-1, or any tax software.
No documents or bills are needed.
🔍 Why Is This Important?
• It brings parity between both regimes
• Boosts the attractiveness of the New Regime
• Helps salaried individuals reduce tax burden without needing to invest or submit proofs
• Allows incomes up to ₹7 lakh to become completely tax-free under Section 87A rebate
Final Words
Yes, the standard deduction of ₹50,000 is fully applicable under the New Tax Regime for FY 2024–25. This makes the New Regime more appealing for salaried individuals who don’t claim other deductions but still want basic tax relief.
Our tax experts can help you understand the latest changes and maximise your savings.
👉https://callmyca.com/salaried-itr
