Standard deduction for Tax Year 2026–27
Reviewed 16 October 2026. For salary income earned from 1 April 2026 to 31 March 2027, the Income-tax Act, 2025 applies. Section 19 allows a standard deduction of up to ₹75,000 when tax is computed under the default regime in section 202(1), or up to ₹50,000 in other cases. In each case the deduction cannot exceed the salary amount. The standard deduction reduces salary income used in the tax computation; it is not a cash refund.
The Income Tax Department also lists the same ₹75,000 and ₹50,000 amounts for Assessment Year 2026–27 under the previous Income-tax Act, 1961. That return covers income earned up to 31 March 2026 and uses the old Act’s section 16(ia). The figures match, but the law, section references and filing forms differ. See the Department’s section 19 text and transition FAQ.
How the deduction changes salary income
| Tax computation route | Maximum deduction | What to check |
|---|---|---|
| Default regime under section 202(1) | ₹75,000 or salary, whichever is lower | Use the eligibility and computation rules for the relevant Tax Year. |
| Other regime | ₹50,000 or salary, whichever is lower | Confirm that you validly opted for this route and which exemptions and deductions remain available. |
For example, if an employee has ₹6,00,000 of salary income before the standard deduction, the salary amount after this deduction is ₹5,25,000 under the default route, or ₹5,50,000 under the other route, before adding or adjusting any other income or deduction. This example shows only the standard deduction. It is not the employee’s final taxable income or tax bill.
Do not choose a regime from this deduction alone
The ₹25,000 difference does not by itself show which regime produces a lower final tax. The calculation can also depend on other income, eligible deductions and exemptions, special-rate income, rebate or relief, and the way an individual may opt for a regime under the Act. Some items commonly discussed under the old Act use different section numbers or conditions in the Income-tax Act, 2025. Do not assume that an old section 80C, 80D or HRA claim carries over unchanged to Tax Year 2026–27.
Compare your full facts under the rules for the correct period. The Department’s section 202 text explains the default regime and the associated conditions. Our Tax Year 2026–27 income-tax guide explains the transition, and the CTC to In-Hand Calculator estimates tax using the assumptions shown in the tool. The calculator does not decide whether an individual deduction is legally available.
Which period are you reviewing?
- FY 2025–26 / AY 2026–27: Income through 31 March 2026 is governed by the Income-tax Act, 1961. The standard deduction is ₹75,000 under the new regime and ₹50,000 under the old regime, subject to the salary limit and applicable conditions.
- Tax Year 2026–27: Income from 1 April 2026 is governed by the Income-tax Act, 2025. Use section 19 and current rules, not old Act section references. The annual return for this tax year is filed after the tax year ends.
Keep salary records and the tax period clearly labelled. If your payroll spans the April 2026 transition, check each payment against the tax year and the Act that governs it. For personal tax advice, use the Department’s income and tax estimator and consult a qualified tax professional where needed.