Standard Deduction and Other Salary Deductions – Section 19 Explained

Published by Zakir Ali · Last updated 23 October 2026 · 6 min read · Based on the Income-tax Act, 2025 and Income-tax Rules, 2026

Under the Income-tax Act, 2025, the income chargeable under the head "Salaries" is computed after the deductions listed in the Table in section 19(1) (the old law's section 16 and parts of section 10 – see our mapping guide). Each row shows the nature of the sum and the maximum deduction.

Standard deduction (Sl. 2)

• ₹75,000 or the salary, whichever is less, where income-tax is computed under section 202(1) (the new regime);
• ₹50,000 or the salary, whichever is less, in any other case.

Example. A teacher with a salary of ₹9,20,000 in the new regime: salary ₹9,20,000 − standard deduction ₹75,000 = total income ₹8,45,000. Slab tax = 5% of ₹4,00,000 (₹20,000) + 10% of ₹45,000 (₹4,500) = ₹24,500, which the section 156 rebate cancels completely (see the ₹12 lakh guide).

Professional tax (Sl. 1)

Tax on employment under article 276(2) of the Constitution is deductible in full – but section 202(2) says this deduction is not available when tax is computed under the new regime.

Retirement-related items in the Table

Sl.	Receipt	Deduction
3	Death-cum-retirement gratuity (as referred to in section 19(2)(g))	Entire amount
4	Retiring gratuity under the Pension Code / Regulations of the defence services	Entire amount
5	Gratuity under the Payment of Gratuity Act, 1972	Amount received, limited to the amount worked out under section 4(2) and (3) of that Act
6	Any other gratuity on retirement, incapacity or termination	Least of: actual gratuity; the amount notified by the Central Government; half a month's salary for each completed year of service
7	Commutation of pension under the Civil Pensions (Commutation) Rules or similar schemes for Central/State civil services, all-India services, defence services and local authorities	Entire amount
8	Commutation of pension under a scheme of any other employer	One-third of the pension if gratuity is also received, otherwise one-half
12	Voluntary retirement scheme payment	Least of the amount received and ₹5,00,000
13	Cash equivalent of earned leave at credit on retirement – Central or State Government employee	Entire amount
14	Same, for other employees	Least of four limits, including 10 months' average salary and the amount notified by the Central Government

So for State Government employees – including teachers in Andhra Pradesh and Telangana – gratuity (Sl. 3), commutation of pension (Sl. 7) and leave encashment on retirement (Sl. 13) are deductible in full. For Sl. 6 and Sl. 14, "salary" includes dearness allowance if the terms of employment provide so (section 19(2)(b)).

Where to read more

• The full text: section 19, and the meaning of salary in sections 15 and 16.
• Perquisites (rent-free housing, etc.): section 17 and Rule 15.
• Arrears of salary: section 157 and Form 39 (relief when salary is paid in arrears or in advance).

Remember: the Table gives maximum amounts – your claim must also satisfy the conditions in the section. For personal advice, speak to your DDO or a Chartered Accountant.

More guides

• Arrears of Salary – Relief under Section 157, Rule 73 and Form No. 39 (Old 89(1))
• Capital Gains Tax Rates 2026-27 – Shares, Mutual Funds and Property under the New Act
• Clubbing of Income – Section 99: When Spouse or Minor Child Income Is Added to Yours
• Filing Income Tax Return Late – Fee under Section 428 and Interest under Sections 423 to 425

This guide is for general information and is not tax advice. Tax figures are before health and education cess unless stated. The law and the official notifications are the final authority – see our Disclaimer. Found a mistake? Tell us.