What is the standard deduction available to salaried employees and pensioners

Question

I am a salaried employee and I heard there is a standard deduction I can claim without any bills or proof, and I want to understand how it works. I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

What is the standard deduction available to salaried employees and pensioners is governed in India primarily by Income-tax Act, 1961, Section 16(ia), Income-tax Act, 1961, Section 115BAC and Income-tax Act, 2025. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 16(ia) of the Income-tax Act, 1961 provides a flat standard deduction from salary income, available to every salaried employee and pensioner without needing to submit any bills, receipts or proof of expenditure, and the amount of this deduction is periodically revised and differs slightly between the old regime and the new regime under Section 115BAC.

The standard deduction is available under both the old regime and the new regime under Section 115BAC, unlike most other deductions such as house rent allowance exemption or Section 80C investments, which are available only under the old regime, making it one of the few benefits salaried taxpayers retain even after opting for the concessional new regime.

Pensioners, including those receiving pension from a former employer, are also entitled to claim the standard deduction against their pension income, treated as salary income for this purpose, though family pension received by a dependent after the death of the employee is taxed under income from other sources and is eligible for a separate, smaller deduction rather than the standard deduction under Section 16(ia).

Since the exact monetary amount of the standard deduction is revised from time to time through the Finance Act, you should check the amount applicable for the specific assessment year you are filing for, rather than assuming a figure from a previous year continues to apply.

What to do next: 1) Confirm the current standard deduction amount for the relevant assessment year; 2) Claim the deduction automatically in the salary schedule of your return; 3) Check the correct treatment if you receive family pension rather than direct pension; 4) Verify whether the amount differs between old and new regime for that year.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Income-tax Act, 1961, Section 16(ia) carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.