ZERO Income Tax with Tax Rebate 87A in Old and New Tax Regime (Hindi)

ZERO Income Tax with Tax Rebate 87A in Old and New Tax Regime (Hindi)
In this video by FinCalC TV we will see how to pay zero income tax using tax rebate under section 87a with old and new tax regime in hindi. Tax rebate 87a is available with old tax regime when taxable income is below Rs. 5 lakh and with new tax regime when taxable income is below Rs. 7 lakh in financial year. Note that you also get standard deduction of Rs. 50,000 and Rs. 75,000 with old and new tax regime. Let us see tax rebate 87a examples with income tax excel calculator

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What is Tax Rebate Section 87A?
Tax Rebate under Section 87A is a concept of giving relief to the Indian citizens having lower incomes in a financial year
So in old tax regime, if your taxable income is up to Rs. 5 lakh, your income tax according to 5% tax slab will be Rs. 12,500. This tax will be nullified by Tax Rebate under Section 87A, which has limit of Rs. 12,500, and hence you don’t have to pay any tax
Please note that in case your income is above Rs. 5 lakh in financial year, you have to pay this 5% slab (Rs. 12,500 tax), along with the tax on income above Rs. 5 lakh and include cess of 4% as well. In such case where income is above Rs. 5 lakh, you won’t get tax rebate 87A benefit under old tax regime.

On the other hand, with new tax regime, the limit of taxable income is Rs. 7 Lakh, So based on new tax slab rates, on taxable income of Rs. 7 lakh, your income tax will be Rs. 20,000 which will be nullified by tax rebate 87A that provides you maximum Rs. 20,000 as rebate under old tax regime
Please note that if your income goes above Rs. 7 lakh in financial year, this Rs. 20,000 have to be paid as income tax in new tax regime so no relief will be provided in such case

Tax Rebate under Section 87A Eligibility
What defines your eligibility for tax rebate under Section 87A? We can easily identify this based on the tax regimes:

Old Tax Regime: You are eligible for tax rebate 87A in old tax regime only when your taxable income is Rs. 5 lakh or below in FY 2024-25
New Tax regime: You are eligible for tax rebate 87A in new tax regime only when your taxable income is Rs. 7 lakh or below in FY 2024-25
Above limits can be extended if you are salaried employee or pensioner, since you get standard deduction of Rs. 50,000 and Rs. 75,000 as flat deduction in old tax regime and new tax regime respectively.

Limits of Tax Rebate under Section 87A
The limits of tax rebate 87a is mentioned below:

Old Tax Regime: Tax Rebate 87A limit is Rs. 12,500, when your taxable income is Rs. 5 lakh or below
New Tax regime: Tax Rebate 87A limit is Rs. 20,000, when your taxable income is Rs. 7 lakh or below

#IncomeTax #TaxRebate87A #fincalc

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DISCLAIMER:
Examples and demo used are for Illustration purpose only and might not cover every detail of examples shown.
I Am Not A SEBI Registered Adviser. All The Information Provided By Me Are For Educational/Informational Purposes Only. We Do Not Take Any Responsibility For The Accuracy Of The Data But As It May Contain Typographic Or Other Errors And Inaccuracies And We Expressly Disclaim Liability For Any Errors On The YouTube Channel (FinCalC TV). Please consult your Financial Advisor before taking any decision or action in terms of your Finances.