Old regime salary standard deduction
Under Section 16(ia) of the Income-tax Act, 1961 for AY 2026–27, the old-regime standard deduction is generally up to ₹50,000, limited to salary or qualifying own pension included in income.
Calculate standard deduction
Deduction
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Taxable amount
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Family pension uses a separate deduction under income from other sources.
How This Is Calculated
The standard deduction is a flat deduction from salary or pension income, available without needing to submit any proof of expenses. For FY 2025-26, it is ₹75,000 under the new tax regime for salaried employees and pensioners, and ₹50,000 under the old tax regime. Family pension recipients get a separate, smaller standard deduction instead (see the dedicated Family Pension Standard Deduction Calculator).
Frequently Asked Questions
Finin2min practical explanation · 11 October 2026
Salary, own pension and family pension: standard deduction calculator AY 2026–27
For AY 2026–27, salary and an employee’s own taxable pension ordinarily fall under the salary-head standard deduction. Family pension received by a beneficiary is generally income from other sources and has a separate one-third/ceiling deduction.
Four points that determine the correct answer
New regime salary standard deduction
For eligible taxpayers under the new regime, the salary standard-deduction ceiling is ₹75,000 for the relevant assessment year. The deduction is not an additional cash rebate and cannot turn salary into a negative amount.
Family pension: different legal head
Family pension ordinarily falls under Section 57(iia): deduction of one-third of qualifying family pension, subject to the applicable cap (generally ₹15,000 in the old regime and ₹25,000 in the new regime for the relevant year). Do not apply Section 16(ia) to a survivor’s family pension.
Tax calculation remains separate
Other salary exemptions/deductions, rebate, special-rate income, pension from other heads and choice of regime require a separate total-income computation. This calculator produces an isolated deduction estimate, not a final income-tax payable figure.
Worked example
For AY 2026–27, gross employee pension of ₹6 lakh in the new regime gives a ₹75,000 standard deduction, leaving ₹5.25 lakh before other salary adjustments. Separately, ₹90,000 of family pension gives the lesser of one-third (₹30,000) or ₹25,000: deduction ₹25,000, leaving ₹65,000 for the relevant income head.
Errors to avoid
- Treating family pension as an employee’s own salary pension.
- Applying both the ₹75,000 salary deduction and the family-pension deduction to the same income.
- Using AY 2026–27 figures indiscriminately for another assessment year.
Questions readers ask
Does a retired employee’s own pension qualify as salary income?
Generally yes for income-tax classification of employer pension; family pension is different.
Can I claim ₹75,000 on ₹40,000 of salary?
No. The standard deduction cannot exceed the salary income to which it applies.