Standard Deduction Calculator

The standard deduction is available only to salaried individuals and pensioners. Self-employed individuals and freelancers cannot claim the standard deduction. However, they can claim actual business expenses incurred for earning their income.

The standard deduction was introduced in 2018 at 40,000, replacing transport allowance and medical reimbursement. It was increased to 50,000 in 2019 and has remained at that level since.

Yes, the standard deduction of 50,000 is available in both the old and new tax regimes. This is one of the few deductions that survived in the new regime.

Yes, pensioners who receive a pension are entitled to claim the standard deduction of ₹50,000, as pension is treated as salary income for tax purposes. If a pensioner also has salary income from re-employment, the standard deduction is available only once, capped at ₹50,000 combined.

Family pension received by the legal heirs (spouse, children, or other dependents) after the pensioner's death is not eligible for the standard deduction. Instead, family pension is taxable under the head "Income from Other Sources" and is eligible for a separate deduction of up to ₹15,000 or one-third of the family pension, whichever is less, under Section 57(iia).

Pensioners who also earn income from business or profession can claim the standard deduction of ₹50,000 against their pension income. However, the standard deduction is specifically available only against "Income from Salaries" (which includes pension). Business income is taxed separately under "Profits and Gains of Business or Profession" and does not qualify for the standard deduction.

Yes, you can claim the standard deduction if you receive salary from multiple employers, but the total standard deduction is capped at ₹50,000 across all employers combined. Each employer may apply the standard deduction when calculating TDS, but at the time of filing your ITR, you must ensure the total standard deduction claimed does not exceed ₹50,000 across all salary incomes.

The standard deduction is shown in Part B of Form 16 under the section "Deductions under Section 16." Your employer deducts ₹50,000 from your gross salary before computing TDS. The standard deduction is automatically applied by most employers and does not require any declaration or proof of investment from the employee. It is reflected in box 1 of the salary details in Form 16.

Allowances received by MPs, MLAs, and MLCs are taxable under the head "Income from Other Sources," not "Salary." Therefore, the standard deduction of ₹50,000 applicable to salaried individuals does not apply to their allowances. However, they can claim actual expenses incurred for performing their official duties as a deduction under Section 57, subject to specified limits.

Various industry bodies and tax experts have recommended increasing the standard deduction to ₹1,00,000 to provide relief to salaried taxpayers, especially given inflation since the last revision in 2019. However, no official announcement has been made. Historically, the government has occasionally revised the standard deduction in Union Budgets, so taxpayers should watch for announcements in the annual budget speech.