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Section 87a Calculator — Calculations & Slabs for FY 2026-27

Enter your total taxable income to check whether you qualify for the Section 87A rebate -- Rs 12,500 under the old regime or Rs 25,000 under the new regime -- for FY 2025-26.

1. Income & Investments

Frequently Asked Questions (FAQ)

What is Section 87A rebate and who is eligible?

Section 87A rebate is a tax relief mechanism provided to individuals whose net taxable income does not exceed a statutory limit. In the Old Regime, the limit is ₹5 Lakhs, giving a maximum rebate of ₹12,500. In the New Regime (for FY 2026-27/Budget 2026), the limit is ₹12 Lakhs, offering a maximum rebate of up to ₹60,000.

Does the standard deduction apply before claiming 87A?

Yes. The standard deduction (₹75,000 for New Regime and ₹50,000 for Old Regime for salaried individuals) is deducted from your Gross Salary to determine your Net Taxable Income. Section 87A eligibility is evaluated based on this Net Taxable Income.

How does marginal relief work under the New Tax Regime?

If your taxable income is slightly above the ₹12 Lakh limit under the New Regime, you could face a high tax bill on small incremental earnings. Marginal relief ensures that the tax payable does not exceed the amount by which your taxable income exceeds ₹12 Lakhs, cushioning the tax burden.

Is Section 87A rebate available to NRI taxpayers?

No. The tax rebate under Section 87A is strictly available only to resident individuals in India. Non-Resident Indians (NRIs) are not eligible to claim this rebate, regardless of their total income.

Where can I verify the source data for this calculator?

You can verify the values against the official notifications listed in our data sources section at the bottom of the page.

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About This Calculator

Target Audience: Salaried taxpayers, investors & retirees planning Indian tax & wealth growth

💡 What Does This Calculator Do?

This calculator computes the tax rebate available under Section 87A of the Income Tax Act for both Old and New Tax Regimes. It helps you see how much tax rebate you receive, applies marginal relief for incomes slightly above the tax-free limits under the New Regime, and calculates your final tax payable including cess.

📋 How to Use It

  1. 1
    Gross Annual Income (₹): Enter your total annual income from all sources.
  2. 2
    Is Salaried: Select whether you are a salaried employee to apply the standard deduction.
  3. 3
    Regime: Select either the Old Regime or the New Regime.
  4. 4
    Section 80C Investments (₹): Enter your eligible investments (only applicable for the Old Regime).

🧬 The Logic Explained Simply

  • The Concept: Section 87A rebate is designed to reduce the tax burden on middle-income taxpayers. If your taxable income is below a threshold, your tax liability is reduced to zero. Under the New Regime, the rebate is up to ₹60,000 for income up to ₹12 Lakhs (Budget 2025), with marginal relief to prevent a sudden tax spike for earning slightly over ₹12 Lakhs. Under the Old Regime, the rebate is up to ₹12,500 for income up to ₹5 Lakhs.
  • The Formula:
  • Taxable Income = Gross Income - Standard Deduction - Deductions (80C, etc.)
  • New Regime Rebate = If Taxable Income <= ₹12,0,000, Rebate = Tax (max ₹60,000). If > ₹12,00,000, Marginal Relief applies: Tax after Rebate = min(Tax, Taxable Income - 12,00,000).
  • Old Regime Rebate = If Taxable Income <= ₹5,00,000, Rebate = min(Tax, ₹12,500).

💡 Real-World Calculation Breakdown

For example, a salaried individual earns ₹12,10,000 under the New Tax Regime:

  • Standard Deduction = ₹75,000
  • Net Taxable Income = ₹12,10,000 - ₹75,000 = ₹11,35,000
  • Tax before rebate on ₹11,35,000 (FY 2026-27 slabs):
  • Up to 4L: Nil
  • 4L to 8L: 5% of 4L = ₹20,000
  • 8L to 11.35L: 10% of 3.35L = ₹33,500
  • Total Tax before Rebate = ₹53,500
  • Since Net Taxable Income (₹11,35,000) is below ₹12,00,000, the individual is eligible for a full Section 87A rebate of ₹53,500.
  • Final Tax payable = ₹0

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