For the financial year 2025-26 (assessment year 2026-27), first-time income tax filers with a salary of Rs 2.4 lakh and long-term capital gains from listed equities of Rs 4.5 lakh can expect a total tax liability between Rs 35,000 and Rs 42,000 under the default new tax regime.
This amount combines:
- Slab-based taxation on salary income (after accounting for the standard deduction), and
- Long-term capital gains taxed at 12.5% on the amount exceeding the Rs 1.25 lakh exemption.
A 4% health and education cess is applicable on the total tax. Filing your first income tax return by July 31, 2026, is important to avail applicable rebates and to formally lock in your chosen tax regime.
Income Breakdown
Total gross income is Rs 6.9 lakh, comprised of Rs 2.4 lakh in salary and Rs 4.5 lakh in capital gains from listed equity. These gains are taxed at special rates:
- Short-term gains (STCG) are taxed at a flat 20% (for shares sold after July 2024).
- Long-term gains (LTCG) are taxed at 12.5% on the amount exceeding the Rs 1.25 lakh exemption.
New Regime Slabs
The default new regime for FY 2025-26 (AY 2026-27) applies with these slabs (plus 4% cess):
- Rs 0-4L: 0%
- Rs 4-8L: 5%
- Rs 8-12L: 10%
- Rs 12-16L: 15%
- Rs 16-20L: 20%
- Rs 20-24L: 25%
- Above Rs 24L: 30%
Rebate up to Rs 60,000 makes income ≤Rs 12L tax-free; basic exemption Rs 4L.
Tax Calculation (LTCG Assumption)
Salary Income:
- Gross Salary: Rs 2.4 Lakh
- Less: Standard Deduction: Rs 0.75 Lakh
- Net Taxable Salary: Rs 1.65 Lakh (This amount falls within the nil-tax slab).
Long-Term Capital Gains (LTCG):
- Total Gains: Rs 4.5 Lakh
- Less: Exemption: Rs 1.25 Lakh
- Taxable LTCG: Rs 3.25 Lakh
- Tax @12.5%: Rs 40,625
Total Taxable Income (for slab calculation):
- Net Salary (Rs 1.65 Lakh) + Full LTCG (Rs 4.5 Lakh) = Rs 6.15 Lakh
Tax on Slab Income (New Regime):
Income after Rs 4 Lakh basic exemption: Rs 2.15 Lakh
Tax @5%: Rs 10,750
Rebate u/s 87A Application:
- Condition: Total Income (Rs 6.15 Lakh) is below Rs 12 Lakh.
- Effect: The full rebate of Rs 12,500 is applied against the slab tax of Rs 10,750, reducing it to zero.
- Important: The special-rate LTCG tax of Rs 40,625 remains payable.
Final Tax Liability:
- LTCG Tax: Rs 40,625
- Add: Health & Education Cess @4%: Rs 1,625
- Net Tax Payable: ≈ Rs 42,250
Note: The rebate under Section 87A eliminates tax on income taxed under slab rates but does not cover tax payable under special rates like those for LTCG.
Revised Tax Calculation Summary
Total Taxable Income: Rs 6.9 Lakh (Rs 2.4 Lakh salary + Rs 4.5 Lakh capital gains, with no standard deduction applied to gains).
Tax Computation:
Slab Tax on Total Income (New Regime):
- Income above Rs 4 Lakh exemption: Rs 2.9 Lakh.
- Tax @5%: Rs 14,500.
Special Rate Tax on LTCG:
- Gains after Rs 1.25 Lakh exemption: Rs 3.25 Lakh.
- Tax @12.5%: Rs 40,625.
Preliminary Tax Total:
- Rs 55,125 (Rs 14,500 + Rs 40,625).
Rebate u/s 87A Application (Key Benefit):
- Since total income (Rs 6.9 Lakh) is below Rs 12 Lakh, you are eligible for a rebate.
- The rebate can reduce your total tax liability by up to Rs 12,500 (not Rs 60,000), effectively covering the entire
- slab tax portion of Rs 14,500.
- The special-rate LTCG tax of Rs 40,625 remains payable.
Final Liability (Approximate):
- Post-Rebate Tax: ~Rs 40,625 (LTCG Tax)
- Add: 4% Cess: ~Rs 1,625
- Estimated Net Tax: Rs 42,250
Important Note: The estimated net payable of Rs 42,250 falls within the typical Rs 35,000–Rs 42,000 range for this income profile, with minor variations possible based on exact calculation. Filing your first ITR by July 31, 2026, is essential to claim this rebate and formally select your preferred tax regime. For the precise figure, please use an official income tax calculator.
Filing Advice
File ITR-2 or ITR-3 by July 31, 2026 (or extended); report in Schedule CG. No prior filing means new regime defaults, but opt old if deductions (e.g., 80C) available. Use official tax calculator; consult CA for gain nature confirmation.
FAQs
Will the Section 87A rebate apply to a combined income of Rs 6.9L
The Section 87A rebate for FY 2025–26 under the new tax regime is available only if your total income (including capital gains) is Rs 12 lakh or less a threshold you meet with Rs 6.9 lakh. However, this rebate applies solely to the tax on income taxed at normal slab rates, such as your salary after deductions. It does not reduce any tax computed at special rates, such as the 12.5% due on your long-term equity gains. Consequently, while the rebate will offset the minimal slab tax on your salary, the full tax liability on your Rs 4.5 lakh in stock gains remains payable.
Do I need to pay advance tax for these capital gains?
Advance tax is mandatory for FY 2025-26 as your total tax liability—primarily from Rs 4.5 lakh in capital gains estimated at Rs 44,000–93,000 plus cess—exceeds the Rs 10,000 threshold, even if your salary TDS falls short. The four installments are due on June 15 (15%), September 15 (45% cumulative), December 15 (75% cumulative), and March 15 (100% final), but you may adjust payments based on when gains are actually realized to avoid interest under Sections 234B/C for underpayment; being a first-time filer does not exempt you from this requirement.
Which ITR form should I file for salary plus capital gains?
One must file ITR-2 for FY 2025-26, as it is the prescribed form for individuals with income from salary and any capital gains from stocks (exceeding the basic exemption for LTCG), while ITR-1 (Sahaj) is ineligible for such cases.
In the return, report your salary (after the Rs 75,000 standard deduction under the new regime) and disclose all capital gains in Schedule CG with transaction details.
Opt for the new tax regime, compute tax liability factoring in that the Section 87A rebate applies only to the slab-tax portion, and e-file by July 31, 2026, using your Form 16 and broker statements, ensuring you pre-validate your bank account for a seamless refund process if applicable.
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