₹60,000 Section 87A rebate in New Tax Regime: Not applicable to LTCG, STCG from equity, I-T Dept clarifies

The Income-tax department has clarified that the ₹60,000 rebate in New Tax Regime under Section 87A of the Income-tax Act, 1961 is not available on incomes for which special rates have been provided in the Act. These special rate incomes include long-term and short-term capital gains (LTCG and STCG) from equity mutual funds and equity shares). Gains from lottery are also not eligible for rebate.

"Rebate is not available on income from capital gains or lotteries or any other income on which special rate has been provided in the Act. It is available only on the tax payable as per slabs under section 115BAC(1A) of the Income-tax Act, 1961 or section 202 of the Income-tax Act, 2025," the Tax Department said in a FAQ.

What is the maximum rebate allowed?

The maximum rebate allowed is available is ₹60,000 which is there for a tax payer having income of ₹12 lakh on which tax is payable as per the new regime slabs.

How much income is eligible for rebate and Nil taxation under new tax regime?

The rebate is applicable only on incomes that are chargeable at slab rates and the maximum limit is Rs 12 lakh. For salaried employees, this amount is ₹12.75 lakh due ₹75,000 rebate in the new regime.

"In the new tax regime, the maximum total income for which tax liability for individual taxpayers is NIL is ₹ 12 lakhs on account of claim of rebate," the tax department said.

"The benefit of such Nil tax liability mentioned above is available only in the new tax regime. This New tax regime is the default regime. To avail the benefit of rebate allowable under proposed provisions of new tax regime, a return is required to be filed," it added.