Exemption Snapshot
Maximum Deduction Cap
₹75,000 Flat
Annual IT Act Exemption
Potential Direct Tax Savings
Up to ₹7,800 tax saved
Cash kept in your bank
Eligible Tax Regime
New Tax Regime (₹50k in Old)
Budget FY 2026-27 Guidelines
How This Deduction Directly Lowers Your Monthly TDS
When you submit investment declarations to your company HR portal via Form 12BB, payroll calculates your projected annual tax liability after subtracting these statutory deductions, dividing the remaining tax evenly across 12 monthly payslips.
Frequently Asked Questions
Who is eligible for the enhanced ₹75,000 Standard Deduction?
All salaried employees and pensioners opting for the New Tax Regime are automatically eligible for the flat ₹75,000 deduction without needing any investment proofs or bills.
How much income tax does the extra ₹25,000 standard deduction save?
For employees in the 20% slab, it saves ₹5,200/year. For employees in the 30% slab, it saves ₹7,800/year in direct tax liability.
Compare Old vs New Tax Regime for Your Salary
Want to find out whether deductions under the Old Regime save you more tax than the New Regime slabs?
Use Tax Regime Calculator →