Help Required - U/S 87A

Why you see different income limits:

1. ₹12,00,000 limit: This is the upper limit where rebate completely phases out under the new tax regime
2. ₹13,40,000 for salaried people: This accounts for:
• Gross income of ₹13,40,000
• Less: Standard deduction of ₹50,000 (for salaried)
• Less: Basic exemption considerations
• Effective taxable income: Around ₹12,90,000 (still within phase-out range)

Section 87A Rules & Basis of Calculation:

New Tax Regime (AY 2026-27):

• Full Rebate: Available if taxable income ≤ ₹7,00,000
• Partial Rebate: Phases out between ₹7,00,000 to ₹12,00,000
• No Rebate: If taxable income > ₹12,00,000
• Rebate Amount: Lower of ₹12,500 or actual tax liability

Formula for Phase-out:

Rebate = Base Rebate × (1 - [(Taxable Income - 7,00,000) ÷ 5,00,000])

For Salaried Employees:

• Gross income can be ₹50,000 higher due to standard deduction
• This explains why you see rebate showing for income up to ₹13,40,000

The calculator we have includes:

• Interactive rebate computation
• Phase-out calculations
• Different scenarios for salaried vs other individuals
• Downloadable Excel file with formulas

The rebate doesn't abruptly stop at ₹12,00,000 but gradually reduces, which creates the effect you observed where some rebate shows even at higher income levels for salaried individuals. This rebate calculator is free if interested email me at addressing to Minati  help @ hanaset.com.