Standard deduction for salaries hiked to ₹75,000 under new tax regime

The standard deduction for salaried employees will be hiked to ₹ 75,000, up from ₹50,000, under the new income tax regime in 2024-25, finance minister Nirmala Sitharaman announced on Tuesday (July 23). It will apply to those who opt for the new tax regime.

"For those opting for the new tax regime, the standard deduction for salaried employees to be increased from ₹50,000 to ₹75,000,” Nirmala Sitharaman announced. 

Presenting the Budget in the Lok Sabha, the minister has also increased the deduction limit from 10 per cent to 14 per cent for employers' contribution for the National Pension System (NPS). 

Family pension

The government has also proposed to increase tax deduction on family pension for pensioners to ₹25,000 from ₹15,000.

The minister said salaried employees will now on save up to ₹17,500 annually in taxes under the new teax regime due to the changes proposed in the budget.

She also announced the withdrawal of the 2 per cent equalisation levy.