Section 87A Rebate FY 2025-26 (AY 2026-27) - Rs 60,000 New Regime + Rs 12,500 Old Regime, Marginal Relief Calculator

Section 87A Rebate FY 2025-26 - Rs 60,000 New Regime + Rs 12,500 Old Regime Complete Guide

Section 87A Latest Update (10 May 2026)

Bhaiyon, Section 87A Rebate FY 2025-26 (AY 2026-27) me GAME-CHANGER update Budget 2025 ke through aaya:

NEW Tax Regime (Default):

• Rebate Rs 60,000 (was Rs 25,000)
• Income limit raise to Rs 12 lakh (was Rs 7 lakh)
• Add Rs 75,000 standard deduction = Rs 12.75 lakh tak salaried tax-free

OLD Tax Regime:

• Rebate Rs 12,500 (UNCHANGED)
• Income limit Rs 5 lakh (UNCHANGED)

Crore+ middle-class taxpayers ko massive relief. Page me: rebate calculation step-by-step, marginal relief mechanism, NEW vs OLD regime comparison, special incomes (LTCG/STCG/online gaming) jo eligible nahi, common mistakes, ITR filing impact.

🚨 Practical: Rs 12 lakh annual income (CTC) wale ke liye NEW regime me ZERO tax with rebate. Pehle Rs 80K+ tax bharte the - Rs 80K saving.

Section 87A Rebate Quick Comparison Table

Big shift: New regime saving Rs 35K+ for Rs 7-12L income earners. Old regime stagnant - most filers should switch to NEW.

Section 87A Eligibility - Kaun Claim Kar Sakta?

✅ Eligible:

• Resident Individuals only (Indian residents)
• Tax filers with income within slab limits
• Both regimes (with respective limits)

❌ NOT Eligible:

• NRI (Non-Resident Indians)
• HUF (Hindu Undivided Families)
• AOP / BOI (Association/Body of Persons)
• Companies / Firms / Partnerships
• Senior Citizens >60 (eligible but separate higher exemption applies first)

NRI Note: Even if income arises in India, NRIs can't claim 87A rebate. Different rules for residential status.

Section 87A New Regime FY 2025-26 - Step-by-Step Calculation

Tax Slabs (NEW Regime FY 2025-26):

Example 1: Salaried Rs 11 lakh CTC

1. Gross salary: Rs 11,00,000
2. Standard deduction: Rs 75,000 = Taxable Rs 10,25,000
3. Tax (slabs): (Rs 4L × 5%) + (Rs 2.25L × 10%) = Rs 42,500
4. Section 87A Rebate: Rs 42,500 (capped at tax)
5. Final Tax: Rs 0 ✅

Example 2: Salaried Rs 13 lakh CTC

1. Gross: Rs 13,00,000 - Std Ded Rs 75K = Rs 12,25,000 taxable
2. Income > Rs 12 lakh = NO 87A rebate
3. Tax: Rs 4L×5% + Rs 4L×10% + Rs 25K×15% = Rs 63,750 + 4% cess = Rs 66,300
4. (Marginal relief check below)

Section 87A Marginal Relief - Income Just Above Rs 12 Lakh

Cliff problem: At Rs 12L = Rs 0 tax, but Rs 12.10L = Rs 60K+ tax = Rs 10K extra income → Rs 60K extra tax = unfair.

Marginal Relief Solution: Tax payable cannot exceed excess income above Rs 12 lakh.

Example: Income Rs 12,10,000

• Without relief: Tax Rs 61,500 (basic) - excess Rs 10K
• With marginal relief: Tax limited to Rs 10,000 (excess income amount)
• Saving: Rs 51,500

Marginal Relief Cutoff:

Approximately Rs 12,75,000 income me marginal relief khatam ho jata hai - above that pay full tax per slabs.

Section 87A Old Regime FY 2025-26 (Unchanged)

Tax Slabs (OLD Regime):

Example: Income Rs 5 lakh (after 80C/HRA deductions)

1. Tax (slabs): Rs 2.5L × 5% = Rs 12,500
2. Section 87A Rebate: Rs 12,500
3. Final Tax: Rs 0 ✅

Old Regime Advantage: Worth only if you have high HRA + 80C (Rs 1.5L) + 80D (Rs 25K) + 80CCD(1B) NPS (Rs 50K) deductions = Rs 3L+ deductions. Otherwise NEW regime wins.

Section 87A Rebate - Incomes NOT Eligible (Special Rates)

Special-rate income on which 87A rebate cannot be claimed:

• LTCG on equity shares + equity MFs (Section 112A) - taxed at 12.5% over Rs 1.25 lakh
• STCG on equity (Section 111A) - taxed at 20% (raised from 15% in Budget 2024)
• Online gaming winnings (Section 115BBJ) - taxed at 30% flat
• Lottery winnings (Section 115BB) - taxed at 30% flat
• Crypto/VDA (Section 115BBH) - taxed at 30% flat

Implication: Rs 12 lakh salary + Rs 1 lakh LTCG = rebate applies on salary tax only; LTCG taxed separately.

Section 87A Common Mistakes to Avoid

Section 87A Rebate FAQs

Q: Rs 12 lakh income me NEW Regime me kitna tax? A: ZERO ✅ - Rs 60,000 rebate full tax cover karta hai. Salaried (Rs 75K std ded) wale Rs 12.75 lakh tak ZERO.

Q: Old Regime me 87A kis income tak? A: Rs 5 lakh tak Rs 12,500 rebate (unchanged). 80C/80D deductions add to extend.

Q: NRI ko milta hai? A: NAHI - sirf Resident Individuals. NRI/HUF/AOP/BOI/Company excluded.

Q: LTCG ya STCG pe rebate? A: NAHI - Special rate income (LTCG/STCG/online gaming/lottery/crypto) ko 87A rebate nahi milta.

Q: Rs 12.10 lakh income me kya hoga? A: Marginal relief milegi - tax limited to excess income (Rs 10K) instead of full Rs 60K+ tax.

Q: Pichhle saal kitni rebate thi? A: FY 2024-25: New regime Rs 25,000 up to Rs 7L; Old regime Rs 12,500 up to Rs 5L. FY 2025-26 mega upgrade.

Q: Senior citizens ko alag rebate? A: 87A rebate same rules. Plus higher exemption: Rs 3L (60+) / Rs 5L (80+) Old Regime me.

Q: ITR me apply kaise? A: Auto-applied during ITR-1/ITR-2 filing. Income < limit ho to system calculate karta hai. Manual claim required nahi.

Q: Salary + business mix income ka kya? A: Total income consider hota hai. Resident individual ke liye 87A applicable - business + salary combined.

Related Tax Saving + ITR Pages

• New vs Old Tax Regime 2025-26 Calculator - Detailed comparison + which regime saves more
• Income Tax Slab Rates 2026 FY 2025-26 - Complete slab breakdown
• Standard Deduction 2026 Rs 75,000 - Salaried Rs 75K (NEW) vs Rs 50K (Old)
• ITR Filing 2026 Salary Guide - Step-by-step ITR-1 filing
• Section 80C Tax Saving Guide - Rs 1.5L deduction (Old regime only)
• Section 80D Health Insurance Tax - Rs 25K-1L deduction
• NPS National Pension System Guide - 80CCD(1B) Rs 50K extra
• HRA House Rent Allowance Tax - Salaried specific
• Form 16 Download Guide - Salaried TDS certificate
• Capital Gains Tax LTCG STCG - Stocks/MF separately taxed (no 87A)

Auto-applied during ITR - kisi calculator ko paisa mat dena!

Source: Income Tax India (incometax.gov.in) + Union Budget 2025-26 Finance Bill