𝗜𝗻𝗰𝗼𝗺𝗲 𝗧𝗮𝘅 𝗥𝗲𝗯𝗮𝘁𝗲 𝗨𝗻𝗱𝗲𝗿 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟴𝟳𝗔
Section 87A of the Income Tax Act provides tax relief to resident individuals. This relief helps taxpayers pay zero tax if their total income stays below certain limits.
New Tax Regime Details:
- Individuals with total income up to Rs 12 lakh can claim a rebate of up to Rs 60,000.
- This rebate results in zero tax liability.
- Marginal relief applies if income slightly exceeds Rs 12 lakh.
- Marginal relief limits the tax to the amount by which income exceeds Rs 12 lakh.
- This relief applies only if total taxable income is less than Rs 12,70,588.
- The rebate does not apply to income taxed at special rates like capital gains or lottery winnings.
Old Tax Regime Details:
- A rebate of up to Rs 12,500 is available for individuals with taxable income up to Rs 5 lakh.
- The rebate applies to total income tax.
- It excludes long-term capital gains from equity shares, equity-oriented funds, or business trusts under Section 112A.
Upcoming Changes:
- Section 87A will be replaced by Section 156 of the Income Tax Act, 2025.
- This change starts on 1 April 2026 for Financial Year 2026-27.
Source: The Times of India