Key takeaways<\/strong><\/p>\n\n\n\n Section 87A gives a rebate that reduces your final tax. It applies after your tax is calculated on the slabs, and it can wipe out the tax entirely if your income is within the limit. The rebate is the lower of the actual tax payable or the maximum rebate amount, so it never makes your tax negative, it simply brings it to zero at most.<\/p>\n\n\n\n The rebate amount and the income limit are different under the two regimes, so the regime you choose decides how much benefit you get.<\/p>\n\n\n\n For FY 2025-26, the new regime gives a rebate of up to \u20b960,000. A resident individual with taxable income up to \u20b912 lakh pays no tax, because the rebate cancels the entire tax calculated on the slabs.<\/p>\n\n\n\n Salaried individuals and pensioners also get the \u20b975,000 standard deduction. After subtracting it, a salary of up to \u20b912.75 lakh leaves taxable income of \u20b912 lakh, which the rebate makes tax-free. This is why \u20b912.75 lakh is the tax-free salary figure, while \u20b912 lakh is the tax-free taxable income figure.<\/p>\n\n\n\n The old regime also has a Section 87A rebate, but a smaller one \u2014 up to \u20b912,500, covering taxable income up to \u20b95 lakh. With the old regime’s \u20b950,000 standard deduction, a salaried person earning up to \u20b95.5 lakh can have nil tax, but only if no other income pushes them over. Beyond \u20b95 lakh of taxable income, the old-regime rebate does not apply at all.<\/p>\n\n\n\n Pay \u20b92,499 upfront and get 100% cashback.\n
What is the Section 87A rebate?<\/h2>\n\n\n\n
Rebate under the new regime: Zero tax up to \u20b912 lakh<\/h2>\n\n\n\n
Rebate under the old regime: Zero tax up to \u20b95 lakh<\/h2>\n\n\n\n
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