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CA Intermediate · Taxation · Salaries

Ms. Tanvi Shah, a salaried employee in Mumbai, earned gross salary of Rs 9,50,000 in tax year 2026-27 and opted for the default new regime. Which statement on standard deduction is correct under the Income-tax Act, 2025?

She can claim Rs 75,000. The default new regime allows a standard deduction of Rs 75,000 from salary income, regardless of other income. The Rs 50,000 figure belongs to the old regime, so it is not applicable here.

  1. AShe can claim Rs 75,000 as standard deduction against salaryCorrect
  2. BShe can claim Rs 50,000 as standard deduction against salary
  3. CShe cannot claim any standard deduction under the new regime
  4. DShe can claim the standard deduction only if she has no other income

Explanation

Under the new regime, the standard deduction for salaried individuals is Rs 75,000, allowed irrespective of other income. Rs 50,000 applies to the old regime. Her salary after deduction is 9,50,000 − 75,000 = Rs 8,75,000.

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