Quick Summary
For the financial year 2025-26, the "no tax up to Rs 12 lakh" concession (Rs 12.75 lakh for salaried individuals) is applicable only if your total taxable income falls within this limit and is primarily composed of income taxed at normal slab rates (e.g., salary). It does not apply to income taxed a
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FAQ :
Yes, under the new tax regime for FY 2025-26, a tax rebate makes total income up to Rs 12 lakh tax-free. For salaried individuals, this can effectively be up to Rs 12.75 lakh if it's solely salary income after the standard deduction.
If your total taxable income, including salary, dividends, interest, and other sources, exceeds Rs 12.75 lakh, the full tax rebate is withdrawn, and you will be liable to pay income tax on the entire amount based on the slab rates.
In the new tax regime, income from dividends and interest is taxed at your personal income tax slab rate and is included in your total taxable income when determining eligibility for the tax rebate.
No, the 'no tax up to Rs 12.75 lakh' concession primarily applies to income taxed at normal slab rates, such as salary. It does not apply to income taxed at special rates, like certain long-term capital gains.
The old tax regime does not offer a high rebate for incomes around Rs 12-12.75 lakh. A rebate under section 87A is only applicable if your total income is up to Rs 5 lakh.
You should compute your total income under both the new and old tax regimes, considering all deductions and income sources. Then, use an online income-tax calculator for FY 2025-26 with your exact figures to compare the tax liability under each regime and choose the one that results in lower tax.
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