Archive · 28 Jul 2025
ITR Filing: Section 87A Rebate Confusion Explained
When you file your taxes, you might be wondering about a special discount called Section 87A.
It helps people with lower and middle incomes.
Right now, for the taxes you're filing this year, you could get up to a Rs 25,000 discount if your income is under Rs 7 lakh, if you picked the new tax system.
But next year, the rules change: the government will let you have a bigger discount up to Rs 60,000 if you make up to Rs 12 lakh.
Remember to pick the right tax plan and double-check your income and deductions!
Taxpayers are facing confusion regarding the Section 87A rebate during ITR filing.
Section 87A offers tax rebates to resident individuals with taxable income below certain limits.
For FY 2024-25, the rebate is up to Rs 25,000 in the new tax regime for income up to Rs 7 lakh.
Budget 2025 announced an increase in the rebate to Rs 60,000 under the new regime, effective FY 2025-26.
Taxpayers must carefully choose their tax regime and calculate income and deductions correctly.
- Who
- Resident individual taxpayers.
- What
- The impact of Section 87A tax rebates on taxpayers.
- When
- The current ITR filing season (FY 2024-25) and future changes (FY 2025-26).
- Where
- India, concerning its income tax regulations.
- Why
- To clarify the eligibility and amounts for Section 87A tax rebates.
Current vs. Future Tax Rules
Changes in Tax Rebate
Tax Regime Benefits
Current vs. Future Tax Rules
FY 2024-25 rules apply now; rebates capped based on current income.
Changes in Tax Rebate
Budget 2025 introduces expanded rebates, effective from the next financial year (2025-26).
- Section 87A Purpose
- Provide tax relief to low and middle-income individuals.
- FY 2024-25 Rebate (New Regime)
- Up to Rs 25,000 for income up to Rs 7 lakh.
- FY 2025-26 Rebate (New Regime)
- Up to Rs 60,000 for income up to Rs 12 lakh.
- Applicable Regime
- Old and New Tax Regimes
- Applicability
- Only for Resident Individuals
