Section 155 - Rebate to be allowed in computing income-tax
Section 155 is the gateway. Compute tax on total income first, then apply the resident-individual rebate under section 156. The rebate cannot exceed the tax computed before this Part, so it can reduce tax to nil but cannot create a refund by itself.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Current law and effective date
Section 155 is controlled against the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The Act and Income-tax Rules, 2026 operate from 1 April 2026; earlier years and saved proceedings require the repeal-and-savings framework rather than automatic migration.
Primary statute: Income Tax Department consolidated Act | Rules: Notified Income-tax Rules, 2026
2-minute decode
Section 155 is the gateway. Compute tax on total income first, then apply the resident-individual rebate under section 156. The rebate cannot exceed the tax computed before this Part, so it can reduce tax to nil but cannot create a refund by itself.
Who should use this section
Resident individuals who may be entitled to the section 156 tax rebate after total income and tax have first been computed.
Old-law bridge
Section 87
The old-law bridge is navigational, not automatic precedent transfer. Match the 1961 Act wording, saved proceedings, current 2025 Act text and effective date before importing an older interpretation.
Finance Act 2026 / current-law note
No section-specific Finance Act, 2026 textual substitution is separately flagged for section 155; the consolidated post-Finance-Act-2026 text remains the controlling version and must be used instead of pre-1 April 2026 extracts.
Professional alert
Do not confuse a rebate from tax with a deduction from income. Chapter VIII deductions reduce total income; Chapter IX rebate reduces the tax computed on total income.
Connected Income-tax Rules, 2026 and Forms
| Rule | Current control | Form |
|---|---|---|
| No provision-specific Rule/Form is directly prescribed for this section in the mapping used here. Apply the statute directly and check the current Rules where another provision cross-refers to them. | ||
Worked application
Tax before rebate is ₹8,500 and the assessee satisfies section 156. The maximum rebate is ₹8,500 even if the statutory monetary ceiling is higher.
Evidence / compliance checklist
- Preserve the primary agreement, certificate, account statement or transaction record that establishes the facts relevant to section 155 (Rebate to be allowed in computing income-tax).
- Reconcile the section 155 amount to books, return schedules and third-party evidence so the computation can be reproduced without relying on a narrative assertion.
- Keep the current-law source and any prescribed Rule/Form evidence with the tax-year file for section 155; do not rely on a legacy 1961 Act form merely because the section has an old-law bridge.
- Where section 155 contains a threshold, election or time limit, retain dated evidence proving that the condition was satisfied before the return or proceeding was finalised.
Common mistake
A common section 155 error is to apply the old-law label or headline rate without rebuilding the current statutory conditions. For “Rebate to be allowed in computing income-tax”, the safer control is to test the exact taxpayer/transaction facts, the operative tax year, every linked Rule/Form and the Finance Act 2026 consolidated wording. Do not confuse a rebate from tax with a deduction from income. Chapter VIII deductions reduce total income; Chapter IX rebate reduces the tax computed on total income.
Recommended approach
For section 155, start with the legal trigger in “Rebate to be allowed in computing income-tax”, document the evidence for that trigger, then run the computation or procedural step against the current text. As a cross-check, verify this provision-specific checkpoint: Section 155 is the gateway. Compute tax on total income first, then apply the resident-individual rebate under section 156. The rebate cannot exceed the tax computed before this Part, so it can reduce tax to nil but cannot create a refund by itself.
Thresholds, periods and timing checkpoints
- Section 155 contains no standalone numeric checkpoint extracted for the register; apply its operative conditions from the current statutory text.
Related provisions and interaction map
Section 155 interacts with the other sections 155-160, section 202 where the rebate regime is relevant, Rules 73-76 where treaty/FTC procedure applies, and the return/assessment provisions.
Current statutory text
Primary-source trail
Statute: Income-tax Act, 2025 as amended by Finance Act, 2026
Rules: Income-tax Rules, 2026
Law navigation: Income Tax Department 2025 Act / Rules hub
Quoting note: Use the official consolidated Act for verbatim legislative language.
FAQs
Does an old Income-tax Act, 1961 case automatically decide section 155?
No. The old-law bridge helps research, but transferability depends on materially matching language, transition rules and any Finance Act 2026 change.
Which text should be quoted in advice or litigation?
Quote the consolidated official statute for the relevant tax year. If this page presents a provision summary rather than complete statutory text, use the official consolidated Act for verbatim legislative language.