No changes proposed in Section 87A Rebate for AY 2027-28 ( FY 2026-27 ) under New Tax Regime and Old Tax Regime as per Union Budget 2026-27.
The Finance Minister today presented Union Budget 2026-27. No change has been proposed in Section 87A rebate in Union Budget 2026-27 for Section 87A Rebate for AY 2027-28 ( FY 2026-27 ).
The rebate u/s 87A for AY 2026-27 and AY 2027-28 shall be as under:
| Section 87A Rebate under Old Tax Regime | Up to 12500/- i.e. 100 Percent tax rebate under section 87A up to total income of Rs. 5 lakhs |
| Section 87A Rebate under New Tax Regime | Up to Rs. 60000/- i.e. 100% of tax where total income does not exceed Rs. 12 Lakhs |
The Finance Ministry has issued the following Table to illustrate total tax benefit of slab rate changes and rebate at different income levels can be illustrated in the table below:
Section 87A Rebate for AY 2025-26 (FY 2024-25) for New Tax Regime and Old Tax Regime
| AY 2025-26 | AY 2024-25 | |
| Section 87A Rebate under Old Tax Regime | Up to 12500/- i.e. 100 Percent tax rebate under section 87A up to total income of Rs. 5 lakhs | Up to 12500/- i.e. 100 Percent tax rebate under section 87A up to total income of Rs. 5 lakhs |
| Section 87A Rebate under New Tax Regime | Up to Rs. 25000/- i.e. 100% of tax where total income does not exceed Rs. 7 Lakhs | Up to Rs. 25000/- i.e. 100% where total income does not exceed Rs. 7 Lakhs |
Income Tax Rebate under section 87A of Income Tax Act 1961 provides a rebate from income tax up to Rs. 12500/- to an individual resident assessee whose total income (taxable income) does not exceed Rs. five lakhs.
Thus, for those not opting for New Simplified Personal Income Tax Regime, taking into account deduction available under section 80C, income up to Rs. 7.00 lakhs (Rs. 12 lakhs for AY 2026-27) will be out of tax net.
Marginal relief under section 115BAC:
Marginal Relief ensures that the tax payable by a person having income marginally above Rs 12 lacs is required to pay only marginal amount of tax equal to the amount of income above Rs 12 lacs so that his carry home is also Rs 12 lacs. In this case he will be required to pay a tax of Rs 10,000/-
For example, for a person having income of Rs. 12,10,000/-, in the absence of marginal relief, the tax, works out to be Rs. 61,500/-(5% of Rs.4 lacs+10% of 4 lac and 15% of Rs.10 thousand). However, due to marginal relief, the amount of tax to be actually paid is Rs. 10,000/- (the amount by which the income exceeds Rs. 12 Lakhs).
The following table gives an example of Marginal relief for various income brackets:
| Taxable Income | Tax without Marginal relief (Rs.) | Marginal Relief (Rs.) | Tax actually payable with marginal relief (Rs.) |
| (a) | (b) | (c) | (d) [(b)+(1200000-(a)] |
| 12,10,000/- | 61,500/- | 51,500/- | 10,000/- |
| 12,50,000 | 67,500/- | 17,500/- | 50,000/- |
| 12,70,000/- | 70,500/- | 500/- | 70,000/- |
| 12,75,000/- | 71,250/- | Nil | 71,250/- |
Calculation of functional disability depends on assessing the victim’s earning capacity in the open, competitive market – Supreme Court In…
Appeal against every decision of ITAT shall lie only before the High Court within whose jurisdiction the Assessing Officer who…
Supreme Court recommends action against Commissioner of Customs who relied upon non-existent AI generated case laws. Supreme Court recommends action…
ITAT power to pass such orders "as it thinks fit" implies a judicial discretion to be exercised within the parameters…
Mere non-deduction of TDS by the deductor on a transaction does not change the character of the transaction to make…
ICAI has extended the last date to online submit Multipurpose Empanelment Form (MEF)- 2026-27 from 29th August 2026 to 9th…