Section 87A rebate

Under the new regime, a resident whose taxable income is at most ₹12,00,000 gets a rebate of up to ₹60,000, which cancels the slab tax entirely. With the ₹75,000 standard deduction, that means a salary of up to ₹12,75,000 pays no tax. Under the old regime the limit is ₹5,00,000 and the most it gives is ₹12,500.

The rebate comes off before cess is added, so there is no cess left to pay either. It does not reduce tax on income charged at special rates, such as most capital gains, and non-residents cannot claim it. The 2025 Act numbers it Section 156 (formerly 87A).