Standard Deduction Calculator
Calculate Standard Deduction for FY 2024-25
Deduction Summary
Standard Deduction Calculation Breakdown
| Component | Details |
|---|---|
| Gross Income | ₹0 |
| Standard Deduction | ₹0 |
| Professional Tax | ₹0 |
| Total Deduction | ₹0 |
| Taxable Income | ₹0 |
| Marginal Tax Rate | 0% |
| Tax Savings | ₹0 |
| Optimization Tips | - |
For salaried individuals and pensioners in India, the Standard Deduction is a key component of tax planning. Our Standard Deduction Calculator is a simple tool designed to help you quickly determine the deduction you are eligible for under Section 16(ia) of the Income Tax Act, 1961, and see how it reduces your taxable income for the financial year 2024-25.
This guide will walk you through how to use the calculator and explain the rules for claiming the standard deduction under both the Old and New Tax Regimes.
Author’s Note: This calculator provides an estimate based on the data you enter and current tax laws, which are subject to change. It is intended for informational purposes only and should not be considered as legal or tax advice. For personalized advice regarding your specific financial situation, it is always recommended to consult with a qualified chartered accountant or tax professional.
What is the Standard Deduction?
The Standard Deduction is a flat-rate deduction that a salaried individual or a pensioner can claim from their gross salary or pension income, regardless of their actual expenses. It was introduced to simplify the tax filing process by replacing the earlier medical reimbursement and transport allowance exemptions.
For the financial year 2024-25, the standard deduction amount is a flat ₹50,000. This deduction is available to taxpayers under both the Old and the New Tax Regimes.
How to Use the Standard Deduction Calculator
Our calculator is designed for ease of use. Follow these simple steps:
- Enter Your Gross Income: Input your total gross salary or pension income for the financial year.
- Select Your Tax Regime: Choose whether you are opting for the Old Tax Regime or the New Tax Regime. This is important as it affects other potential deductions.
- Add Professional Tax (for Old Regime): If you have paid any Professional Tax during the year and are using the Old Regime, enter that amount. This is a separate deduction allowed under Section 16(iii).
- Calculate Your Deductions: The tool will instantly compute your total eligible deductions and your final net taxable income.
Standard Deduction: Old Regime vs. New Regime
Understanding how the standard deduction works in each regime is key to making an informed choice.
- Under the Old Tax Regime: You can claim the ₹50,000 standard deduction in addition to a wide range of other exemptions and deductions. This includes House Rent Allowance (HRA), Leave Travel Allowance (LTA), and deductions under Section 80C (for investments), Section 80D (for health insurance), and Professional Tax (up to ₹2,500 per year). This regime is generally more beneficial for individuals who have significant investments and expenses to claim.
- Under the New Tax Regime: The ₹50,000 standard deduction is one of the very few deductions available to salaried individuals and pensioners. While this regime offers lower tax rates, it does not allow you to claim most other common deductions like HRA, LTA, or those under Section 80C. The inclusion of the standard deduction makes the New Regime more attractive for those who prefer simplified tax filing without multiple investments.
Frequently Asked Questions (FAQs)
What is Standard Deduction?
The Standard Deduction is a flat amount of ₹50,000 that can be subtracted from your gross salary or pension income to arrive at your taxable income. It is available to all salaried employees and pensioners under Section 16(ia) of the Income Tax Act.
What is the maximum Standard Deduction I can claim?
For the financial year 2024-25, the maximum standard deduction you can claim is ₹50,000.
Can I claim both Standard Deduction and Professional Tax? Yes, but only if you opt for the Old Tax Regime
Under the Old Regime, you can claim the ₹50,000 standard deduction as well as the amount you paid as Professional Tax (up to a maximum of ₹2,500 per year). This is not allowed under the New Tax Regime.
Are non-resident individuals eligible for the Standard Deduction?
No, the standard deduction under Section 16(ia) is only available to resident individuals.