Launch offer — 25% off with code LAUNCH-25 See plans →
Microlesson · 5-min read

Income from Salary - Computation Format

# Income from Salary — Computation Format

Salary is the first head in the computation of Total Income. The format is straightforward.

## Standard Format

ParticularsAmount (₹)
Income from Salary (Gross)xxx
Less: Standard Deduction u/s 16(ia)(xxx)
Income from Salary (Net)xxx

## Standard Deduction Amount

The standard deduction depends on which regime the assessee is taxed under:

RegimeStandard Deduction
Old Regime (normal provisions)₹50,000
New Regime u/s 115BAC (default regime from AY 2024-25)₹75,000

## Key Points

  • The deduction is available only if there is salary income (cannot create or increase a loss).
  • It is allowed irrespective of whether actual expenditure is incurred.
  • For pensioners receiving pension from a former employer, the same standard deduction applies (family pension is IFOS and gets a separate, smaller deduction).
  • From the salary head, the computed figure flows into Gross Total Income.

Worked example

### Example 1

Example 1 — Old Regime

Mr. A receives gross salary of ₹8,00,000 for FY 2025-26. He opts for the old regime.

Particulars
Gross Salary8,00,000
Less: Standard Deduction u/s 16(ia)(50,000)
Income from Salary7,50,000

### Example 2

Example 2 — New Regime u/s 115BAC

Ms. B receives gross salary of ₹8,00,000 for FY 2025-26 under the default new regime.

Particulars
Gross Salary8,00,000
Less: Standard Deduction u/s 16(ia)(75,000)
Income from Salary7,25,000

⚠️ Common exam mistakes

  • Applying ₹50,000 standard deduction under the new regime — the correct figure is ₹75,000 u/s 115BAC.
  • Claiming standard deduction against family pension income — family pension is IFOS and gets a separate deduction (lower of ₹15,000 or 1/3 of pension; ₹25,000 under 115BAC).
  • Claiming standard deduction where there is no salary income at all — it is available only against salary/pension.
Bare-Act text Section 16(ia) & Section 115BAC · Income-tax Act, 1961 · click to expand
Section 16(ia): The income chargeable under the head 'Salaries' shall be computed after making the following deductions, namely:— (ia) a deduction of fifty thousand rupees or the amount of the salary, whichever is less. Section 115BAC: Standard deduction enhanced to ₹75,000 for assessees taxed under the new tax regime.
Now that you've read this — what's next?
Move from understanding → mastery in 3 clicks. Each option below picks up from this lesson's topic.
Start 15-min diagnostic