Floridians could get tax break to elevate homes under new proposals to avoid flooding. I wonder how much that would cost?  

How Section 87A Rebate Saves ₹60,000 for Salaried Employees

Section 87A is a tax rebate that directly reduces your income tax liability. Unlike deductions such as Section 80C or Section 80D, which reduce taxable income, Section 87A reduces the tax payable after the tax has been calculated.

For FY 2025-26 (AY 2026-27), resident individuals opting for the new tax regime can claim a rebate of up to ₹60,000 if their taxable income does not exceed ₹12 lakh. Under the old tax regime, the maximum rebate remains ₹12,500 for taxable income up to ₹5 lakh.

Section 87A Rebate Limits

ParameterNew Tax RegimeOld Tax RegimeMaximum Rebate₹60,000₹12,500Income LimitUp to ₹12,00,000Up to ₹5,00,000Standard Deduction (Salaried)₹75,000₹50,000Effective Zero-Tax Salary₹12,75,000Depends on deductions

Under the new regime, the ₹60,000 rebate exactly offsets the tax liability on taxable income of ₹12 lakh, resulting in zero income tax.

Who Can Claim the Rebate?

Eligible

Resident individuals

Salaried and non-salaried individuals

Individuals with business or professional income, provided their taxable income is within the prescribed limit

Not Eligible

Non-Resident Indians (NRIs)

Residents Not Ordinarily Resident (RNOR)

Hindu Undivided Families (HUFs)

Firms, LLPs, and companies

Individuals whose taxable income exceeds the applicable threshold

Why Salaries up to ₹12.75 Lakh Can Be Tax-Free

Salaried employees under the new tax regime receive a ₹75,000 standard deduction.

Example:

Gross Salary: ₹12,75,000

Less: Standard Deduction: ₹75,000

Taxable Income: ₹12,00,000

Tax on ₹12,00,000: ₹60,000

Section 87A Rebate: ₹60,000

Net Tax Payable: ₹0

If a salaried employee has no significant additional income and their gross salary is up to ₹12.75 lakh, they can effectively have zero income tax liability under the new regime.

Marginal Relief

Without marginal relief, crossing the ₹12 lakh limit by even a small amount would result in losing the entire rebate.

Marginal relief ensures that the additional tax payable does not exceed the amount by which the income exceeds ₹12 lakh.

Example

Taxable Income: ₹12,10,000

Regular tax: ₹61,500

Income exceeding ₹12 lakh: ₹10,000

Instead of paying the full tax, marginal relief limits the tax so that it does not exceed the excess income, preventing a sudden increase in tax liability.

Capital Gains and Section 87A

Capital gains are treated differently under the two tax regimes.

New Tax Regime

Special rate income such as STCG under Section 111A and LTCG under Section 112A is excluded while checking the ₹12 lakh threshold.

However, the rebate cannot reduce tax payable on such capital gains.

For example, if an individual has salary income eligible for the rebate along with taxable LTCG, the rebate can reduce tax on salary income but not on the capital gains tax.

Old Tax Regime

Under the old regime, total income including capital gains is considered while checking the ₹5 lakh threshold. If total income exceeds the limit, the rebate is not available.

How to Claim the Rebate

The Section 87A rebate is automatically calculated by the Income Tax e-filing portal based on the income reported in the return.

The process is straightforward:

Report all sources of income.

The portal computes taxable income.

If eligible, the rebate is automatically applied.

Verify the tax computation before submitting the return.

Common reasons why the rebate may not be applied correctly include:

Selecting the wrong tax regime.

Incorrect reporting of capital gains.

Missing interest or other taxable income.

Quick Eligibility Checklist

Before filing your return, ensure that:

You are a resident individual.

Your taxable income is within the applicable threshold.

You have selected the correct tax regime.

Capital gains have been reported correctly.

The rebate shown in the tax computation has been verified.

Key Takeaways

Section 87A is a tax rebate, not a deduction.

Under the new tax regime, eligible individuals can claim a rebate of up to ₹60,000 on taxable income up to ₹12 lakh.

Salaried employees can effectively earn up to ₹12.75 lakh tax-free due to the ₹75,000 standard deduction.

Marginal relief prevents a sharp increase in tax when income slightly exceeds ₹12 lakh.

The rebate does not reduce tax on special rate income such as specified capital gains.

Transferring money from India to another country can be complicated for Non-Resident Indians (NRIs). Between tax regulations, RBI compliance, and banking restrictions, many people end up paying unnecessary charges or facing delays.

Understanding the right process is essential to avoid these issues.

Why Money Transfer Becomes Difficult

Many NRIs face problems such as:

High TCS (Tax Collected at Source)

Complex documentation

Delayed bank processing

Lack of proper financial guidance

These challenges can make a simple transfer stressful and expensive.

A Smarter Way to Transfer Funds

Instead of relying only on traditional banking methods, using a specialized platform can simplify the entire process. Services designed for NRIs handle compliance, taxation, and documentation efficiently.

A reliable option is Remittor, which helps individuals transfer funds from India with minimal hassle and better tax efficiency.

Benefits of Using Professional Services

Faster fund transfers

Reduced tax complications

Complete RBI compliance

End-to-end assistance

If you are planning to move money abroad, choosing the right service can save both time and money.

Budget News: वित्त मंत्री निर्मला सीतारमण ने आम बजट 2026-27 पेश किया। इसमें हिमाचल प्रदेश समेत कई राज्यों में माउंटेन ट्रेल्स बनाने की घोषणा शामिल है। साथ ही छात्रों और छोटे करदाताओं के लिए नई कर छूट योजनाएं प्रस्तावित की गई हैं। ये ट्रेल्स पर्यटन को नई गति देंगे। इन मार्गों का निर्माण पारिस्थितिक रूप से टिकाऊ तरीके से किया जाएगा। उत्तराखंड, जम्मू-कश्मीर और पश्चिमी घाट भी इस योजना में शामिल हैं।…

Budget News: वित्त मंत्री निर्मला सीतारमण ने आम बजट 2026-27 पेश किया। इसमें हिमाचल प्रदेश समेत कई राज्यों में माउंटेन ट्रेल्स बनाने की घोषणा शामिल है। साथ ही छात्रों और छोटे करदाताओं के लिए नई कर छूट योजनाएं प्रस्तावित की गई हैं। ये ट्रेल्स पर्यटन को नई गति देंगे। इन मार्गों का निर्माण पारिस्थितिक रूप से टिकाऊ तरीके से किया जाएगा। उत्तराखंड, जम्मू-कश्मीर और पश्चिमी घाट भी इस योजना में शामिल हैं।…