Moment guide · FY 2026-27

I am claiming the ₹75,000 standard deduction

Is standard deduction ₹75,000 available in both tax regimes?

The standard deduction is a flat ₹75,000 for salaried taxpayers from AY 2025-26, and it is available in both the old and new regimes — a common myth says it is new-regime only. Family pension gets a separate ₹25,000 deduction under section 57(iia), and state professional tax up to ₹2,500 a year is deducted separately under section 16(iii).

The #1 trap

Assuming standard deduction is new-regime only — it was introduced alongside the old regime and applies in both. The second miss: family pension is not eligible for the ₹75,000; it gets a separate ₹25,000 deduction under section 57(iia), and professional tax under section 16(iii) is an additional deduction, not a replacement.

Farhan, marketing lead in Mumbai, and his retired mother

Farhan's gross salary is ₹14,00,000 and his employer withholds TDS under the new regime. After the ₹75,000 standard deduction under section 16(ia), his salary income is ₹14,00,000 minus ₹75,000, which is ₹13,25,000, and the same deduction would apply identically if he opted for the old regime with its lower rates. He also pays professional tax of ₹2,500 to Maharashtra, which is deducted from his salary by the employer and which he claims separately under section 16(iii), bringing his net salary income to ₹13,22,500. Farhan's mother receives a family pension of ₹3,60,000 a year from her late husband's service. She does not get the ₹75,000 salary deduction because family pension is not salary; instead she claims the flat ₹25,000 deduction under section 57(iia), making her taxable family-pension income ₹3,35,000. If she were still working and drawing a salary, her own ₹75,000 deduction would apply to the salary, but the ₹25,000 57(iia) relief is the one that applies to the family pension stream. Farhan's employer cannot claim the ₹2,500 professional tax on his behalf in the return, so he inputs it himself while filing, and he keeps his Form 16 Part B, which already shows the ₹75,000 and the professional tax deducted. The family's total deduction is therefore ₹75,000 plus ₹2,500 for Farhan and ₹25,000 for his mother, with each figure applied in the correct regime and the correct head. A quick call with us dials in the final figure. Farhan also checks that the ₹75,000 standard deduction is available even when he has no other allowances to replace, because it was introduced in place of the old transport and medical reimbursements but is now a flat deduction with no strings attached. If he receives a salary advance or a bonus, the standard deduction still applies to the total salary. His mother's family pension is computed under the head 'income from other sources', which is why the ₹25,000 under section 57(iia) is the correct relief and not the salary standard deduction; if she also held a part-time job, the salary from that job would get the ₹75,000 separately. The deduction is claimed automatically by the employer in the TDS computation, so Farhan verifies that his Form 16 Part B reflects the full ₹75,000 and the professional tax. A quick call with us dials in the final figure.