TL;DR for CAs
- Rebate u/s 87A can reduce tax to nil for eligible income levels.
- Limits differ between old and new regimes.
- Rebate does not cover surcharge/cess in all scenarios—verify current law.
What it is
Section 87A provides a rebate from tax payable for resident individuals below specified taxable income thresholds.
Who it applies to
Resident individuals (not HUFs/companies) within the rebate income limit.
Key provisions
- Check regime-specific income ceilings
- Rebate applies to tax before cess in the manner prescribed
- Marginal relief concepts may interact with slab transitions
Practical tips for CAs
Show clients the break-even income where rebate disappears. Recalculate after last-minute deductions.
Common mistakes
Assuming rebate covers everyone in a slab; ignoring regime differences; confusing rebate with deduction.
For general guidance only. Verify with the latest Finance Act, GST notifications, and ICAI guidance notes before advising clients.