Section 87A Tax Rebate 2025#
What is Section 87A?#
Section 87A provides tax rebate to individual taxpayers with low taxable income.
Rebate Limits (AY 2025-26)#
| Tax Regime | Income Limit | Maximum Rebate |
|---|---|---|
| New Regime | Up to ₹12 lakh | Full tax |
| Old Regime | Up to ₹5 lakh | Full tax |
How Rebate Works#
- Rebate is available only to resident individuals
- Calculated on tax before cess
- No rebate on additional income above threshold
Example Calculation#
For income of ₹8 lakh (new regime):
- Tax on ₹8 lakh: ₹30,000 (5% of ₹5 lakh above ₹3 lakh)
- Rebate: ₹30,000
- Tax after rebate: Nil
For income of ₹15 lakh:
- Tax: ₹1,17,600
- No rebate applicable
- Final tax: ₹1,17,600 + cess
Important Points#
- Rebate not available for non-residents
- Available for both old and new regimes
- Applies before adding health and education cess
- Check Form 26AS for rebate claimed