Income tax budget 2024: Standard deduction for salaried individuals hiked for these taxpayers. Details here

Presenting the Budget for 2024-25 in the Lok Sabha, Finance Minister Nirmala Sitharaman said the standard deduction for salaried employees will be hiked to ₹75,000 from ₹50,000 under the new income tax regime in FY25.

On the standard deduction limit in the new tax regime, Jidesh Kumar, Managing Partner, King Stubb & Kasiva, Advocates and Attorneys, says – “my view is that I appreciate the budget benefits for the working class, women, entrepreneurs and MSMEs. These measures provide crucial relief and show a strong commitment to supporting hardworking individuals.”

Budget 2024 announced a standard deduction of ₹75000 per year for salaried individuals who are new income taxpayers.

“I have two announcements for those opting for the new tax regime. First, the standard deduction for salaried employees is proposed to be increased from ₹50,000/- to ₹75,000/-. Similarly, the pensioners’ family pension deduction is proposed to be enhanced from ₹ 15,000/- to ₹ 25,000/-. This will provide relief to about four crore salaried individuals and pensioners,” said FM Sitharaman

Some of the budget’s expectations included doubling the standard deduction to ₹1 lakh, increasing tax breaks on interest paid on housing loans, and rationalising the capital gains tax regime.

What is standard deduction?

Employees can claim a standard deduction of up to ₹50,000 in a financial year against any taxable income categorized under “Salaries.” This deduction applies to the salary received, whether in arrears, in advance, or for the current period.

The standard deduction was first introduced at ₹40,000 in the 2018 budget and subsequently raised to ₹50,000 in the 2019 budget.