Claim ₹50,000 Standard Deduction + More with TaxBuddy’s Filing

Salaried individuals in India can now claim a ₹50,000 standard deduction for FY 2024-25, reducing taxable salary automatically without the need for submitting proofs for transport or medical allowances. This deduction is a major step toward simplifying tax compliance while enabling significant savings. Alongside other deductions like Section 80C and 80D, taxpayers can further minimize their taxable income. Platforms likeTaxBuddy make claiming these benefits seamless, offering AI-driven automation, guided workflows, and real-time updates aligned with the latest tax laws. Filing taxes efficiently and maximizing deductions is now easier than ever.

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Table of Contents

• Understanding the ₹50,000 Standard Deduction

• Is the Standard Deduction Allowed in the New Tax Regime?

• How the Standard Deduction Works in the Old Tax Regime

• Additional Tax Benefits and Deductions for Maximizing Savings

• How TaxBuddy Simplifies Tax Filing and Claiming Deductions

• Uploading Documents and Bank Details with TaxBuddy

• Tips for First-Time Filers to Maximize Tax Savings

• Common Mistakes to Avoid While Claiming Deductions

• Conclusion

• FAQs

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Understanding the ₹50,000 Standard Deduction

The standard deduction of ₹50,000 for FY 2024-25 allows salaried individuals and pensioners to reduce their gross salary or pension income before calculating taxable income. This deduction is designed to cover basic work-related expenses such as travel, food, or uniform costs without requiring specific documentation. It provides immediate relief by lowering taxable income and, consequently, the overall tax liability. Unlike other deductions under Sections 80C, 80D, or 80E, the standard deduction is automatic and does not depend on actual expenditure, making it a straightforward way to save on taxes.

Is the Standard Deduction Allowed in the New Tax Regime?

Under the new tax regime, the standard deduction is fully allowed. Salaried individuals can claim the ₹75,000 deduction against their taxable salary or pension income without needing additional proof. This deduction is separate from other allowances and exemptions that are restricted under the new regime. While the new regime reduces or removes most exemptions, the standard deduction remains applicable, offering consistent relief for all eligible taxpayers.

How the Standard Deduction Works in the Old Tax Regime

In the old tax regime, the standard deduction of ₹50,000 functions similarly, reducing taxable salary or pension income. Taxpayers can also combine it with other deductions such as House Rent Allowance (HRA),Leave Travel Allowance (LTA), and Section 80C investments to optimize overall tax savings. Proper utilization of the standard deduction in conjunction with other exemptions ensures a lower tax liability while complying fully with the provisions of the Income Tax Act.

Additional Tax Benefits and Deductions for Maximizing Savings

Beyond the standard deduction, taxpayers have multiple avenues to reduce their taxable income by claiming specific deductions under various sections of the Income Tax Act. One of the most commonly used options is under Section 80C, which allows individuals to claim deductions for investments made in financial instruments such as Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), life insurance premiums, and the principal portion of home loan repayments. The total deduction available under Section 80C is capped at ₹1.5 lakh per financial year, so it is important to plan investments carefully to maximize this benefit.

Another important deduction is under Section 80D, which covers premium payments made towards health insurance for self, spouse, and dependent children. This deduction not only helps reduce taxable income but also encourages individuals to maintain health insurance coverage.

Section 24(b) allows taxpayers to claim a deduction on the interest paid on housing loans for self-occupied or rented properties, which can significantly lower taxable income, particularly for homeowners.

Education loans also offer relief under Section 80E, allowing the interest paid on such loans to be deducted from total income, helping students and parents manage the financial burden of higher education.

By combining these deductions strategically, taxpayers can effectively minimize their taxable income while also securing financial and health benefits. Proper planning and awareness of eligibility criteria ensure that all applicable deductions are utilized to their fullest potential, resulting in maximum tax savings.

How TaxBuddy Simplifies Tax Filing and Claiming Deductions

TaxBuddy offers a comprehensive solution that simplifies the entire process of filing Income Tax Returns (ITR) and claiming eligible deductions. The platform is designed to cater to both first-time filers and experienced taxpayers, ensuring that the filing process is smooth, accurate, and time-efficient. One of the standout features of TaxBuddy is its AI-driven interface, which automatically identifies deductions applicable to each taxpayer based on the documents uploaded. This includes common benefits like the standard deduction, as well as other deductions under sections such as 80C, 80D, and 80E, depending on the taxpayer’s profile.

Users can easily upload their salary slips, Form 16, bank statements, and other relevant financial documents, and the system intelligently pre-fills the necessary details in the ITR form. This reduces manual effort and minimizes errors that often occur during self-filing. TaxBuddy also provides clear, step-by-step guidance throughout the process, helping taxpayers understand which deductions they are eligible for and ensuring they maximize the benefits without confusion. By automating calculations and offering an intuitive workflow, TaxBuddy ensures that users can file their taxes efficiently while claiming all applicable deductions, saving both time and effort.

Uploading Documents and Bank Details with TaxBuddy

TaxBuddy allows taxpayers to upload essential documents such as Form 16, salary slips, and investment proofs. Bank account details can also be securely uploaded for refund processing. The platform ensures that all uploaded information is encrypted and safely stored, reducing the risk of errors or delays in refund processing. This streamlined process saves time while ensuring accurate filing and compliance with Income Tax regulations.

Tips for First-Time Filers to Maximize Tax Savings

For first-time filers, understanding how to optimize your taxable income can make a significant difference in the amount of tax you pay and the refunds you receive. One of the simplest ways to start is by claiming the standard deduction. Currently, salaried individuals and pensioners are entitled to a standard deduction of ₹50,000. Ensuring this amount is automatically included in your taxable income helps reduce your tax liability without requiring any additional documentation or approvals.

Maintaining proper records of your investments is another critical step. Investments under Section 80C, such as life insurance premiums, Employee Provident Fund contributions, and tax-saving fixed deposits, can provide deductions of up to ₹1,50,000. Similarly, payments made towards health insurance under Section 80D are eligible for additional deductions. Keeping clear, organized records of these investments ensures you can claim the maximum benefits without missing any opportunities.

It is equally important to verify your Tax Deducted at Source (TDS) details through Form 26AS. This form reflects all taxes already deducted on your behalf by employers, banks, or other institutions. Checking these details carefully prevents errors or mismatches that could delay refund processing.

Leveraging digital platforms like TaxBuddy can simplify the entire process. These platforms automate tax calculations, guide you to claim all eligible deductions, and reduce the chances of errors in your ITR filing. Using such tools ensures a smooth filing experience while maximizing tax savings efficiently.

Common Mistakes to Avoid While Claiming Deductions

Common mistakes while claiming deductions often lead to unnecessary complications, delayed refunds, or even penalties. One of the frequent errors is forgetting to include the standard deduction in taxable income. For salaried individuals, this deduction is automatically allowed under the Income Tax Act, but failing to account for it accurately in the tax computation can result in higher taxable income and consequently higher tax liability.

Another common mistake is misreporting or missing documents related to Section 80C or Section 80D deductions. These sections cover investments and expenses such as life insurance premiums, contributions to provident funds, tuition fees, and health insurance premiums. Incomplete or incorrect documentation can lead to the disallowance of deductions during scrutiny, which may result in additional taxes or delay in processing refunds.

TDS discrepancies are also frequently overlooked. If the tax deducted by employers or other entities does not match the actual tax liability, it can cause mismatches in the ITR, delaying refunds until the discrepancies are resolved.

Additionally, filing ITR manually without proper verification increases the risk of errors. Even minor mistakes in reporting income, deductions, or bank account details can trigger notices from the Income Tax Department and complicate the refund process.

Using a reliable platform like TaxBuddy can help mitigate these common mistakes. The platform provides automated checks, proper documentation prompts, and easy verification options to ensure accurate filing. TaxBuddy also helps in reconciling TDS entries, maximizing allowable deductions, and reducing the chances of errors, making tax filing smoother and more efficient.

Conclusion

The ₹50,000 standard deduction is a simple yet powerful way for salaried individuals and pensioners to reduce taxable income. Combined with other eligible deductions, it can significantly lower overall tax liability. TaxBuddy simplifies this process by providing an intuitive, AI-driven platform that helps taxpayers claim all eligible deductions accurately and efficiently. For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.

FAQs

Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?

TaxBuddy provides both self-filing and expert-assisted plans. Self-filing allows taxpayers to manage their ITR independently using an intuitive interface, automated calculations, and real-time guidance. Expert-assisted plans provide professional support for accurate filing, optimization of deductions, and compliance assurance, ideal for complex returns or first-time filers.

Q2. Which is the best site to file ITR?

While the official Income Tax e-filing portal is widely used, TaxBuddy is among the best platforms due to its AI-driven automation, user-friendly mobile interface, seamless error checks, and options for both self-filing and expert-assisted filing. It simplifies the filing process and reduces chances of mistakes compared to manual filing.

Q3. Where to file an income tax return?

ITR can be filed online through the Income Tax Department’s e-filing portal or through platforms like TaxBuddy. The process requires logging in with your PAN, selecting the correct ITR form, entering income and deduction details, and submitting the return. TaxBuddy simplifies this by auto-matching Form 16 and other documents.

Q4. Is the ₹50,000 standard deduction applicable to pension income?

Yes, the standard deduction of ₹50,000 is applicable to pension income under the old tax regime. It reduces taxable income for salaried employees and pensioners. TaxBuddy automatically applies this deduction when income is entered, ensuring it is correctly calculated.

Q5. Can first-time filers claim other deductions along with the standard deduction?

Yes, first-time filers can claim other deductions such as Section 80C (investments in PPF, ELSS, etc.), Section 80D (health insurance premiums), and others along with the standard deduction. TaxBuddy provides guidance to combine deductions accurately, maximizing tax benefits.

Q6. Does using TaxBuddy ensure error-free deduction claims?

While no software can entirely replace due diligence, TaxBuddy minimizes errors by auto-calculating deductions, cross-verifying Form 16 and investment proofs, and highlighting inconsistencies before filing. This significantly reduces the risk of mistakes or missed claims.

Q7. How to upload Form 16 and investment proofs on TaxBuddy?

Users can upload Form 16, salary slips, and investment proofs directly through the TaxBuddy platform or mobile app. The system auto-matches income and TDS details, ensuring accurate entry and enabling seamless preparation of the ITR.

Q8. Are TDS details automatically verified by TaxBuddy?

Yes, TaxBuddy automatically verifies TDS details by matching uploaded Form 16 with the Income Tax Department’s records. It flags discrepancies and provides guidance to resolve mismatches before filing, ensuring smoother processing of returns and faster refunds.

Q9. Can deductions under Sections 80C and 80D be combined with the standard deduction?

Yes, deductions under Sections 80C, 80D, and other eligible sections can be claimed in addition to the standard deduction of ₹50,000. TaxBuddy calculates the combined deductions automatically to optimize the taxpayer’s total eligible reduction in taxable income.

Q10. What happens if I miss claiming the standard deduction?

If the standard deduction is missed while filing, taxable income is overstated, which could lead to higher tax liability. Using TaxBuddy ensures that standard deductions and other eligible deductions are applied automatically, reducing the risk of under-claimed benefits.

Q11. Is the standard deduction allowed in both old and new tax regimes?

The ₹50,000 standard deduction is allowed under the old tax regime. In the new tax regime, standard deduction of ₹75,000 can be claimed. TaxBuddy clearly indicates which deductions are available under each regime, preventing filing errors.

Q12. How quickly does TaxBuddy process refunds after filing?

Refunds are generally processed by the Income Tax Department based on the first-come, first-served principle. TaxBuddy helps by ensuring error-free and accurate filing, which can speed up processing. Typically, early and accurate filing through TaxBuddy leads to faster refunds once the Department completes TDS verification.