💰 Section 87A Guide

Section 87A Tax Rebate
FY 2025-26 Revolution

Revolutionary update for FY 2025-26! Section 87A now provides ₹60,000 rebate and complete tax exemption up to ₹12 lakh. Middle-class taxpayers save thousands!

💰 Section 87A Tax Rebate

Section 87A has been revolutionized for FY 2025-26! The rebate has increased from ₹25,000 to ₹60,000, and the income limit has jumped from ₹7 lakh to ₹12 lakh, making it a game-changer for middle-class taxpayers.

🎯 Eligibility & Rebate Amount

Old Regime: Income up to ₹5,00,000

Rebate: 100% of tax or ₹12,500 (whichever is lower)

💡 Effective zero tax for income ≤ ₹5L (old regime)

FY 2024-25: Income up to ₹7,00,000

Rebate: ₹25,000 (complete tax exemption up to ₹7L)

💡 Zero tax liability for income ≤ ₹7L

🎉 FY 2025-26: Income up to ₹12,00,000

Rebate: ₹60,000 (complete tax exemption up to ₹12L)

🚀 Revolutionary enhancement for middle class!

Marginal Relief Benefits

For income slightly above ₹12L, tax limited to excess amount

💡 Prevents sudden tax jumps beyond threshold

Important Note

Only individual taxpayers eligible (not HUF, companies, etc.)

📊 Calculation Examples

Example 1: Income ₹4,50,000

Gross Income:₹4,50,000

Less: Standard Deduction:₹75,000

Taxable Income:₹3,75,000

Tax (Old Regime):₹6,250

87A Rebate:-₹6,250

Final Tax:₹0

Example 2: Income ₹10,00,000 (FY 2025-26)

Gross Income:₹10,00,000

Less: Standard Deduction:₹75,000

Taxable Income:₹9,25,000

Tax Calculation:₹52,500

87A Rebate (FY 2025-26):-₹52,500

Final Tax:₹0

Complete rebate as income ≤ ₹12L (FY 2025-26)

Example 3: Income ₹12,25,000 (Marginal Relief)

Taxable Income:₹11,50,000

Excess above ₹12L:₹25,000

Tax on total income:₹67,500

87A Rebate:-₹42,500

Final Tax (= Excess):₹25,000

Marginal relief: Tax = excess above ₹12L

⚖️ Old vs New Tax Regime - Section 87A Comparison

🏛️ Old Tax Regime

Income Limit:₹5,00,000

Maximum Rebate:₹12,500

Zero Tax Income:Up to ₹5L

• Available with all deductions under 80C, 80D, etc.
• Better for those with high deduction investments

🆕 New Tax Regime

FY 2024-25 Limit:₹7,00,000

FY 2025-26 Limit:₹12,00,000

Enhanced Rebate:₹60,000

Zero Tax Income:Up to ₹12L

• Revolutionary 71% increase in rebate limit (₹7L → ₹12L)
• Marginal relief available beyond ₹12L
• Massive benefit for middle-class taxpayers
• Standard deduction ₹75,000

💡 Key Points to Remember

• Rebate applies only to individuals, not HUF or companies

• Total income includes salary, house property, business income

• Rebate calculated on total income after all deductions

• Cannot claim if opting for presumptive taxation

• Senior citizens (60+) not eligible for enhanced rebate

• Rebate automatically calculated in ITR filing

📋 How to Claim Section 87A Rebate

Salaried Employees

1. Employer automatically calculates during salary processing

2. Reflects in Form 16 issued by employer

3. No separate application required

4. Verify in salary slips and Form 16

Self-Employed/Business

1. Calculate total income for the year

2. Apply rebate if income ≤ ₹5L (old) or ₹7L (new)

3. Claim while filing ITR

4. Rebate auto-calculated by ITR software

Maximize Your Section 87A Benefits

Use our tax calculator to determine your exact rebate amount and choose the best tax regime.

Section 87A Tax RebateFY 2025-26 Revolution