I am on H-1 B and not sure whether I can take standardized deduction of $5350 (US-India treaty) for year 2007.

If not what itemized deductions can I claim?

If you converted from F-1 to H-1B in 2007, you CAN claim the $5,350 standard deduction under provisions of the tax treaty.

If you entered the U.S. n the H-1B and must file as either a dual-status or non-resident alien, then the $5,350 standard deduction is NOT permitted. The itemized deductions you can claim are state and local income taxes withheld, charity donations and employee business expenses.