Skip to main content
Income tax

Section 87A Rebate and New-Regime Marginal Relief Calculator — AY 2026–27

Reviewed by Finin2min Editorial Desk · Last reviewed 7 September 2026

Calculate normal slab tax, section 87A rebate and marginal relief under the old or new regime for a resident individual.

2-minute answer

Section 87A Rebate and New-Regime Marginal Relief Calculator — AY 2026–27 should be read as an operative legal provision, not just a heading. Use the statutory text, effective-date/amendment status, connected rules/forms and the factual checklist below before applying it.

What this page answers

  • Rebate inputs
  • AY 2026–27 assumptions
  • How This Is Calculated

Practical checklist

  • Read the operative text and amendment/effective-date status first.
  • Map the provision to connected rules, forms, notifications and exceptions.
  • Apply the provision to the actual facts rather than relying on the section heading alone.
  • Keep the document trail that proves dates, amounts, approvals and compliance steps.

Official sources

Related Finin2min guidance

Reviewed for currentness and usability on the date shown on this page. Where facts, notifications or portal behaviour differ, the primary authority prevails.

Rebate inputs

Rebate / marginal relief
—
Tax including cess
—
Normal slab tax before rebate—
Calculation guidance will appear here.
Income-tax Act, 2025 note: Section 87A, discussed throughout this page, becomes Section 156 under the Income-tax Act, 2025, effective FY 2026-27. For FY 2025-26 and earlier, Section 87A remains the correct citation — the rebate thresholds and marginal-relief mechanics themselves are unaffected by the renumbering, only the section number changes. Section numbering note: This calculator uses the Income-tax Act, 1961 terminology, including Section 87A, for AY 2026-27 references. If applying the Income-tax Act, 2025 for a later year, verify the corresponding provision and exact wording from the official Gazette or Income Tax Department before citing a section number.

How This Is Calculated

Under the new tax regime, resident individuals get a full rebate (up to ₹60,000) if net taxable income is up to ₹12,00,000 — making tax effectively zero. Above ₹12L, marginal relief applies so tax payable never exceeds the amount of income over ₹12L. Under the old regime, the rebate is smaller — up to ₹12,500 for resident individuals with net income up to ₹5,00,000. Section 87A rebate is not available to non-residents under either regime.

Frequently Asked Questions

What is the Section 87A rebate limit for FY 2025-26? ▼
Under the new regime, resident individuals with net taxable income up to ₹12,00,000 get a full rebate (capped at ₹60,000), making regular slab tax zero. Under the old regime, the rebate is capped at ₹12,500 for net income up to ₹5,00,000 — a much lower threshold.
What is marginal relief under Section 87A? ▼
If your income is just above ₹12 lakh (new regime), marginal relief ensures your tax doesn't exceed the amount by which your income exceeds ₹12 lakh — so you don't end up worse off than someone earning exactly ₹12 lakh just because you crossed the threshold by a small amount.
Is Section 87A rebate available to NRIs? ▼
No. The Section 87A rebate is available only to resident individuals. Non-resident Indians (NRIs) are not eligible for this rebate under either tax regime, regardless of their income level.
Does 87A rebate apply to capital gains income? ▼
No, for most capital gains. Section 87A rebate applies to tax on regular slab income; long-term and short-term capital gains taxed at special rates (e.g., LTCG on equity) are generally excluded from the rebate computation, with specific carve-outs depending on the asset type — this calculator focuses on regular income tax.

Related guidance: Marginal Relief Calculator FY 2026-27: Surcharge and Rebate | Finin2min · Old vs New Tax Regime Calculator — AY 2026–27 | Finin2min

Related Finin2min tools

Old vs New Tax Regime Calculator — AY 2026–27Income Tax & FilingIncome-Tax Surcharge and Marginal Relief CalculatorIncome Tax & FilingSalary and Pension Standard Deduction CalculatorIncome Tax & FilingAgricultural Income Partial-Integration CalculatorIncome Tax & Filing
Last reviewed: 15 July 2026

Methodology, assumptions and sources

Scope: Computes the Section 87A tax rebate and, where applicable, marginal relief for income marginally above the rebate threshold under the new tax regime.

Calculation logic

  1. Under the new regime: if total income does not exceed the rebate threshold for the assessment year, rebate = full tax computed (subject to the maximum rebate cap), bringing tax liability to nil.
  2. Marginal relief: where total income marginally exceeds the threshold and the resulting tax liability (without marginal relief) would exceed the amount of income above the threshold, the tax payable is capped at (Total income − Threshold), so a small increase in income never results in a disproportionately larger tax outgo.
  3. Under the old regime, the rebate applies at a separate (generally lower) threshold and maximum amount, per the applicable provisions — the calculator applies the correct threshold/cap for the regime selected.

Inputs and assumptions

Exclusions and edge cases

Sources

Review status: reviewed and approved by CA Nikhil Gupta on 18 July 2026.

© 2026 Finin2min · Educational decision support · Validate assumptions and applicable law.

Guides that use this calculator

Background, worked examples and the rules behind these numbers.