Section 87A Rebate Calculator – Zero Tax to ₹12 Lakh

Section 87A Rebate Calculator for FY 2026–27

Use this free Section 87A rebate calculator to estimate the resident-individual income-tax rebate under the new or old tax regime for income earned from 1 April 2026 to 31 March 2027. Under the Income-tax Act, 2025, the legacy Section 87A provision is numbered Section 156.

Section 87A Rebate Calculator

Estimate the corresponding Section 156 rebate for Tax Year 2026–27 using ordinary slab-rate income.

Tax regimeNew tax regimeOld tax regime

Residential statusResident individualNon-resident individual

Age during the tax yearAge does not change new-regime slabs.Below 60 years60 to 79 years80 years or more

Gross salary or pension (₹)Before the applicable standard deduction

Other ordinary slab-rate income (₹)Exclude capital gains and other special-rate income

Eligible deductions for selected regime (₹)Do not include the standard deduction already applied

Estimated Rebate Applied

₹0

Taxable income₹0

Income-tax before rebate₹0

Maximum statutory rebate₹0

Tax after rebate₹0

Health and Education Cess at 4%₹0

Estimated final tax₹0

Eligibility status—

Planning estimate for ordinary slab-rate income only. Final tax is rounded to the nearest ₹10.

Reviewed on July 13, 2026 using the Income-tax Act, 2025 as amended by the Finance Act, 2026 and official CBDT section-mapping guidance.

Section 87A was the rebate provision under the Income-tax Act, 1961. From Tax Year 2026–27, its corresponding provision is Section 156 of the Income-tax Act, 2025. The familiar search term remains useful, but eligibility and calculations should follow the current section.

Quick answer: A resident individual under the new regime can receive a rebate of up to ₹60,000 when ordinary taxable income does not exceed ₹12 lakh, plus marginal relief just above that limit. Under the old regime, the maximum rebate is ₹12,500 when total income does not exceed ₹5 lakh.

Section 87A versus Section 156

The official CBDT navigator maps Section 87A of the repealed 1961 Act to Section 156 of the 2025 Act. This page uses “Section 87A calculator” in the title because taxpayers commonly search that name, while the tool and guide use the current Tax Year 2026–27 law.

How to use the rebate calculator

1. Select the new or old tax regime.
2. Select residential status; non-resident individuals cannot claim this rebate.
3. Select age, which affects old-regime slabs for resident senior citizens.
4. Enter salary or pension before standard deduction.
5. Add only income taxed at ordinary slab rates.
6. Enter deductions allowed under the selected regime, excluding standard deduction.
7. Review taxable income, tax before rebate, rebate applied, cess and final tax.

Rebate limits for Tax Year 2026–27

Regime	Who can claim	Income condition	Maximum rebate
New regime	Resident individual	Up to ₹12 lakh; marginal relief may apply above	₹60,000, subject to slab tax
Old regime	Resident individual	Total income up to ₹5 lakh	₹12,500 or tax payable, whichever is lower
Either regime	Non-resident individual	Not eligible	Nil

Rebate is not an exemptionTax is first calculated on taxable income; the eligible rebate then reduces that tax.

Resident individuals onlyHUFs, firms, companies and non-resident individuals cannot claim this rebate.

New-regime rebate calculation

If taxable income is up to ₹12 lakh: rebate = lower of slab tax or ₹60,000

Just above ₹12 lakh: marginal relief = slab tax − income exceeding ₹12 lakh, when positive

Section 156(3) caps the new-regime rebate at the tax payable under the Section 202(1) slab rates. Consequently, the calculator accepts ordinary slab-rate income only and does not use the rebate to offset tax calculated at special rates.

Why ₹12.75 lakh salary can have zero tax

Section 19 provides a standard deduction of up to ₹75,000 against salary or pension under the new regime. Gross salary of ₹12,75,000 can therefore become taxable income of ₹12,00,000. The slab tax is ₹60,000 and an eligible resident individual can receive an equal rebate, leaving no tax or cess.

Marginal relief example above ₹12 lakh

Suppose gross salary is ₹12,80,000 and there is no other income or deduction. After the ₹75,000 standard deduction, taxable income is ₹12,05,000.

• New-regime slab tax before rebate: ₹60,750.
• Income above ₹12 lakh: ₹5,000.
• Marginal rebate relief: ₹55,750.
• Tax after relief: ₹5,000; 4% cess: ₹200.
• Estimated final tax: ₹5,200.

Old-regime rebate example

A resident individual below age 60 with old-regime taxable income of exactly ₹5 lakh has slab tax of ₹12,500. Section 156(1) can reduce that tax to zero. If taxable income exceeds ₹5 lakh, even slightly, this old-regime rebate is not available; there is no equivalent marginal relief at that boundary.

Special-rate income warning: Capital gains, lottery winnings, virtual digital assets and other specially taxed income can materially change the rebate computation. Entering them as ordinary income can produce an incorrect estimate, so they are excluded from this tool.

Who cannot claim the rebate?

• Non-resident individuals.
• Hindu undivided families, firms, companies, trusts and other non-individual taxpayers.
• Old-regime resident individuals whose total income exceeds ₹5 lakh.
• New-regime taxpayers whose income and slab tax fall outside the Section 156(2) rebate and marginal-relief conditions.

Related tax tools

Income Tax Calculator Old vs New Tax Regime Budget 2026 Tax Calculator Advance Tax Calculator Salary Take-Home Calculator Capital Gains Tax Calculator

Frequently asked questions

Is Section 87A still applicable in FY 2026–27?

The rebate continues, but under the Income-tax Act, 2025 the corresponding provision is Section 156. Section 87A is the familiar number from the repealed 1961 Act.

What is the new-regime rebate limit for Tax Year 2026–27?

A resident individual with eligible ordinary taxable income up to ₹12 lakh can receive the lower of slab tax or ₹60,000.

What is the old-regime rebate limit?

A resident individual with total income up to ₹5 lakh can receive the lower of income-tax payable or ₹12,500.

Can a non-resident claim the rebate?

No. Both Section 156(1) and Section 156(2) require the taxpayer to be an individual resident in India.

Can an HUF claim Section 87A or Section 156 rebate?

No. The rebate is expressly for a resident individual, not an HUF or another taxpayer category.

Is ₹12 lakh a basic exemption limit?

No. New-regime slab tax is calculated first. The resident-individual rebate can then reduce eligible tax to zero when the conditions are satisfied.

How does marginal relief work above ₹12 lakh?

When slab tax exceeds the amount by which taxable income exceeds ₹12 lakh, the difference can be allowed as rebate so that pre-cess tax is limited to that excess.

Is the rebate calculated before or after cess?

The rebate reduces income-tax first. Health and Education Cess at 4% is then calculated on the remaining tax.

Does the rebate cover capital-gains tax?

The new-regime deduction under Section 156(2) cannot exceed tax payable under the Section 202(1) slab rates. Special-rate income needs a separate calculation and is excluded from this tool.

Why does age appear in the calculator?

Age does not affect new-regime slabs, but it changes the old-regime basic exemption for resident individuals aged 60 or more.

Official sources

• Income Tax Department – Section 156 rebate for certain individuals
• Income Tax Department – Section 202 new-regime slabs
• Income Tax Department – Section 19 standard deduction
• CBDT – official section navigator mapping 87A to 156
• CBDT – Income-tax Act, 2025 as amended by Finance Act, 2026
• Income Tax Department – Tax Year 2026–27 rates and rebate notes

Disclaimer: This calculator provides an educational estimate and is not tax, legal or filing advice. Actual rebate depends on residence, regime, income classification, deduction eligibility and the law applicable to your facts. Verify the result on the official portal or consult a qualified tax professional.