Section 87A rebate: up to ₹60,000 in the new regime

The Income Tax Department's ITR-1 FAQ: from AY 2024-25 the New Tax Regime is the default option, and you can choose between the old and new regimes every year. Section 87A allows a rebate of ₹12,500 under the old regime and ₹60,000 under the new regime.

Example

Illustrative. Under the new regime your tax before rebate is ₹48,000 and you meet the 87A conditions — the rebate covers it and the tax payable is nil. Under the old regime the same rebate is capped at ₹12,500.

Important

Deductions like 80C work only when you opt out of the new regime in the return. Compare both before you file.

Before you choose

• ☐ Add up the year's salary from your payslips
• ☐ List deductions you would claim in the old regime
• ☐ Compute tax in both regimes
• ☐ Check if you qualify for 87A

Salary slip template — keep the year's pay in one file 👇

Source: Income Tax Department, ITR-1 (Sahaj) FAQ, Q9 and Q11.