Standard Deduction Confusion: Why Employees Get ₹75,000 in the Default Tax Regime but Only ₹50,000 in the Old Regime

For salaried employees, the standard deduction is the first relief that reduces taxable income. After recent tax changes, many people are confused about why the amount differs between regimes. The key doubt is simple: who gets ₹75,000 and who gets ₹50,000?

Default (New) Tax Regime: Standard Deduction ₹75,000

The government has made the new tax regime the default option. Under this regime, salaried employees and pensioners receive a standard deduction of ₹75,000.

This setup offers lower tax rates and easier calculations. No extra paperwork or proof of investments is required for claiming this benefit.

Key Points

• Standard deduction: ₹75,000
• No proof of investments needed
• Lower tax slabs
• Simple and quick filing

Old (Optional) Tax Regime: Standard Deduction ₹50,000

The old tax regime still exists, but it is optional. Employees who claim allowances and deductions such as HRA, LTA, home loan interest, or 80C may prefer this system.

Under this regime, the standard deduction remains ₹50,000.

Key Points

• Standard deduction: ₹50,000
• Other deductions and allowances allowed
• Suitable for employees with higher tax-saving claims

Why Are the Deduction Amounts Different?

The government wants more people to shift to the new regime. Increasing the standard deduction to ₹75,000 makes it more attractive for salaried individuals. It reduces taxable income and keeps filing simple.

Which Regime Saves More Tax?

Choosing the better regime depends on your salary structure and deductions.

Quick Comparison

Final Summary

Here is the bottom line:

• ₹75,000 deduction is available only in the default tax regime
• ₹50,000 deduction applies only in the old regime

Your tax bill depends mainly on which system you choose. Compare both options before filing so that you do not miss out on savings.