Think ₹12.75 lakh salary means zero tax? These incomes may still attract tax
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Section 87A rebate: Why a ₹12.75 lakh salary doesn't always mean zero tax
Under the new tax regime, salaried individuals earning up to ₹12.75 lakh can avoid income tax because of the enhanced Section 87A rebate and the standard deduction. However, this relief applies only to eligible income. Certain incomes taxed at special rates remain taxable even if your salary is below ₹12.75 lakh.
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Capital gains tax: Why you may still pay tax despite the Section 87A rebate
The Section 87A rebate does not apply to capital gains taxed at special rates. Whether you earn gains from shares, equity mutual funds, property or other capital assets, the applicable short-term or long-term capital gains tax must still be paid according to the prescribed tax rules.
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LTCG and STCG tax rules: What investors should know before filing ITR
Different assets have different capital gains tax rules. For listed equity shares and equity mutual funds, long-term capital gains above the exemption limit are taxed at the prescribed rate, while short-term gains are taxed separately. Property, debt funds and unlisted shares also have their own tax treatment depending on the holding period.
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Crypto tax in India: Why virtual digital assets don't get the Section 87A rebate
Income from cryptocurrencies and other virtual digital assets (VDAs) is taxed at a flat 30%, plus applicable cess and surcharge. Taxpayers must also report such income in the VDA schedule while filing their ITR. The Section 87A rebate and basic exemption benefit are generally not available for such income.
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Lottery winnings and horse racing: These incomes remain fully taxable
Income from lotteries, horse racing and certain other speculative sources is taxed at a flat 30%, irrespective of your salary income. Even if your salary qualifies for the Section 87A rebate, these special-rate incomes continue to attract tax under the Income-tax Act.
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ITR filing rules: When you must file a return even below the taxable income limit
Even if your income is below the basic exemption limit, ITR filing may still be mandatory in certain cases. Examples include high electricity bills, foreign travel expenses above the prescribed limit, specified credit card payments and other transactions notified under the Income-tax Act.
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Section 87A rebate: Why filing your ITR is still important
The enhanced Section 87A rebate is available only if you file your income tax return. Simply having eligible income is not enough. Filing your ITR on time helps you claim the rebate, remain tax compliant and avoid unnecessary issues later.
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ITR filing 2026: Check these taxable incomes before claiming the Section 87A rebate
Before filing your ITR, review whether you earned capital gains, crypto income, lottery winnings or other special-rate income during FY 2025-26. Understanding which incomes qualify for the Section 87A rebate, and which do not, can help you avoid tax calculation errors and unexpected tax demands.