Zero tax is payable due to:
- Standard Deduction = Rs. 75,000
- Rebate u/s 87A (even though filing ITR becomes mandatory if income crosses Rs.4 lakh but up to Rs.12 lakh annually).
Calculation
If pensioner receives: Rs.1,06,250 monthly, then yearly pension:
Rs.1,06,250 × 12 = Rs.12,75,000
Standard deduction = Rs.75,000. So taxable income becomes:
Rs.12,75,000 – Rs.75,000 = Rs.12,00,000
Under the new regime (AY 2026-27):
If taxable income is up to Rs.12,00,000 → full rebate Rs.60,000 is applicable.
That means pension up to Rs.1,06,250 per month = Zero Tax
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