Section 87A rebate in FY 2026-27: Who gets full tax relief and who doesn’t?
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Section 87A rebate: Is there a change announced in this Budget 2026?
Budget 2026 has not revised the tax rebate under Section 87A, keeping the existing benefits intact for taxpayers opting for both the old and the new tax regimes in FY 2026-27. The rebate continues to play a crucial role in reducing the tax liability of individuals with lower taxable incomes, especially salaried employees and pensioners.
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Section 87A rebate in FY 2026-27
This means individuals with up to Rs 12 lakh income gets Section 87A tax rebate under the new tax regime. For the old tax regime, it's up to Rs 5 lakh. The income tax rebate is only available for resident individuals. HUFs, NRIs, companies, and super senior citizens cannot claim rebate under section 87A.
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Who is eligible to claim for 87A rebate under LTCG?
If you have long-term capital gains (LTCG) from the sale of listed equity shares or mutual funds, you cannot claim a rebate under section 87A tax rebate for that income. Also, gains up to Rs.1 lakh are tax-free. However, you can claim a rebate for LTCG from other assets like capital assets, real estate, and unlisted shares.
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Who is eligible to claim for 87A rebate under STCG?
If you have short-term capital gains (STCG) from sale of equity shares or equity mutual funds, you can still claim rebate under section 87A.
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Who cannot claim rebate under the new tax regime?
Incomes charged at special rates, such as gambling winning, online games, betting earnings, game show earnings, and virtual digital assets, are not eligible for claiming rebate under section 87A of the new tax regime. Such incomes are taxed at a flat 30% tax rate along with additional surcharge and cess.