New Delhi: Budget 2026 has kept the standard deduction unchanged. This brings no fresh relief on this front for taxpayers. The same limits announced in the previous Budget will continue to apply for the financial year 2026–27. Standard deduction remains one of the few benefits available to salaried individuals and pensioners under the new tax regime, offering a fixed reduction in taxable income without the need to submit investment proofs. While many were expecting a revision, the government has chosen to maintain the existing structure for now.
Under the current income tax rules, salaried individuals can claim the standard deduction under whichever tax regime they opt for. In the new tax regime, a salaried person can claim a standard deduction of up to Rs 75,000 in a financial year. Meanwhile, under the old tax regime, the standard deduction available to salaried taxpayers remains at Rs 50,000.
Who Can Claim the Standard Deduction?
The standard deduction is available to individuals who earn income through salary or pension. This means salaried employees and pensioners can reduce their taxable income by claiming this benefit. However, it is not available to everyone. Freelancers, self-employed professionals, and business owners are not eligible to claim the standard deduction.
Similarly, individuals who earn income only from sources such as rent, capital gains, interest, or business profits cannot claim this deduction, as it is specifically meant for salary and pension income.
How Standard Deduction Lowers Your Tax Burden
The standard deduction reduces your taxable income by allowing a fixed amount to be deducted from your salary or pension. The best part? You don’t need to submit any bills, receipts, or investment proofs to claim it.
What It Means for Pensioners
Pension received from a former employer is treated as salary under income tax rules. This means it is considered taxable income and comes under the head ‘Salaries.’ As a result, senior citizens who receive a pension must follow the same tax rules that apply to salaried individuals including eligibility to claim the standard deduction, wherever applicable.
What If You’ve Worked for More Than One Employer?
If you have changed jobs or worked for multiple employers during a financial year, you can still claim the standard deduction but only once.
This is because the standard deduction is linked to the taxpayer, not the number of employers. So, even if you received salary from two or more companies in the same year, the benefit will be available just a single time while calculating your total taxable income.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: ZEE News
