New ITR Rules: Standard Deduction Increased to Rs 75,000
The new standard deduction limit of Rs 75,000 under the new tax regime aims to provide relief to salaried taxpayers and pensioners, while the tax liability for individuals with income from various sources will be computed based on their total income, including applicable tax rates on capital gains.
The standard deduction for salaried individuals and pensioners has been increased to Rs 75,000 in the 2024-25 Budget, providing relief to taxpayers by reducing their taxable income and simplifying tax filing.
This benefit is available to salaried employees and family pensioners under the new tax regime, but not to self-employed individuals or Hindu Undivided Families (HUFs). The standard deduction was reintroduced in 2018 and has been increased over the years, with the current limit aiming to help taxpayers save money and provide relief to senior citizens.
However, not all individuals will be eligible for the standard deduction. For instance, a housewife with an income of ₹12 lakh from various sources, such as bank interest, dividend, rental income, and capital gains, will not be eligible for a rebate under the Budget 2025 proposals. The tax liability will be computed based on the individual's total income, including income from house property, capital gains, and other sources, with applicable tax rates of 12.5% for Long Term Capital Gain (LTCG) and 20% for Short Term Capital Gain (STCG).
The increased standard deduction is expected to benefit salaried taxpayers and pensioners, simplifying their tax filing process and reducing their taxable income. However, it is essential for individuals to understand the eligibility criteria and applicable tax rates to ensure they take full advantage of the available benefits.