What are the new rules for standard deduction?

What is the standard deduction for senior citizens?

A Senior/Super Senior citizen can claim a deduction upto Rs. 50,000/- u/s 80TTB in respect of interest income earned on savings bank accounts, bank deposits, or any deposit with the post office or co-operative banks.

What qualifies someone for standard deduction?

The IRS lets most people take the standard deduction without having to prove anything. Your standard deduction amount usually depends on your tax filing status. For example, people who are married and filing jointly get a bigger deduction than single filers.

What are the deductions allowed in the new tax regime for FY 2025 26?

For FY 2025–26, the new tax regime effectively makes income up to ₹12 lakh tax-free due to the enhanced rebate of ₹60,000. In addition, a standard deduction of ₹75,000 is available for salaried individuals, making a salary income of up to ₹12.75 lakh effectively tax-free.

What are the drawbacks of standard deduction?

Standard deductions have filing limitations.

You won't be able to take a standard deduction in a few scenarios. For instance, if you are married but filing separately, you may not be able to take the standard deduction if your spouse itemizes. The same is true if you are claimed as a dependent on someone else's return.

How to beat the standard deduction?

To maximize your deductions, you'll have to have expenses in the following IRS-approved categories:

1. medical and dental expenses.
2. deductible taxes.
3. home mortgage interest and points.
4. investment interest.
5. charitable contributions.
6. certain casualty and theft losses.
7. gambling losses to the extent of gambling winnings.

How do you calculate standard deduction?

The amount is determined by your filing status, age, and dependency status. The standard deduction for single filers is $15,750. The standard deduction for married filing separately is $15,750. The standard deduction for married filing jointly is $31,500.

What is the $600 rule in the IRS?

In 2021, Congress lowered the threshold for reporting income on payment apps from $20,000 and 200 transactions annually to $600 for a single transaction. Implementation is being phased in over three years.

Can a senior citizen claim both standard deduction and 80TTB?

No, you cannot claim both 80TTA and 80TTB deductions in the same financial year. While 80TTA applies to individuals under 60, 80TTB is exclusively for senior citizens, providing a higher deduction limit on interest income. Is 80TTB applicable in new tax regime? No, 80TTB is not applicable under the new tax regime.

What age do you get a higher standard deduction?

Higher Standard Deduction for Age (65 or Older)

If you are age 65 or older on the last day of the year and don't itemize deductions, you are entitled to a higher standard deduction.

What are the changes in income tax rule for April 2025?

From FY 2025-26 onwards, taxpayers filing returns under the new tax regime can claim a rebate of up to Rs. 60,000. Taxpayers filing returns under the Old Tax Regime can claim a rebate of up to Rs. 12,500.

What is the new tax regime for senior citizens?

In the old tax regime , the basic exemption limit for senior citizens is Rs. 3,00,000/- and for super senior citizens, it is Rs. 5,00,000/-. In the new tax regime, no income tax is payable upto the total income of Rs. 7 lakh.

What is the tax exemption for senior citizens in 2025-26?

The exemption limit for the financial year 2025-26 available to a resident senior citizen is Rs. 3,00,000. The exemption limit for non-senior citizen is Rs. 2,50,000.

What exemptions are allowed in the new tax regime?

The basic tax exemption limit of ₹2.5 lakhs under the old tax regime increased to ₹3 lakhs under the new tax regime in Budget 2024 and further increased to ₹4 lakhs in Union Budget 2025. The latest exemption limit is applicable from 01 April 2023 and it continues in 2024 as well when opting for the new tax regime.

What is the additional standard deduction for those over 65?

Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000. This new deduction is in addition to the current additional standard deduction for seniors under existing law.

What is standard deduction with example?

Standard deduction is a type of deduction provided by the Income Tax Act that allows a person to lower the tax to be paid by subtracting a particular amount of sum from his total gross salary. Earlier, the provision of standard deduction was only available under the old tax regime.

What is the new limit for senior citizens?

Income Tax Slab For Senior Citizen & Super Senior Citizen FY 2025-26 (AY 2026-27) The Income Tax Act 1961, offers a higher basic exemption limit to senior citizens under the Old Tax Regime. Senior Citizens above 60 years of age but not above 80 years enjoy a basic exemption limit of Rs. 3 lakhs.

How does the standard deduction work?

How does the standard deduction work?” The standard deduction is a fixed dollar amount that reduces the income you're taxed on and is the most common type of deduction taxpayers take. The standard deduction: Allows you to take a tax deduction even if you have no expenses that qualify for claiming itemized deductions.

Do senior citizens have to pay tax on FD interest?

Senior citizens receiving interest income from FDs can avail TDS exemption up to ₹1 lakh per year (for FY 2025-26). Till March 2025, senior citizens can claim tax exemption up to ₹50,000.