The Statutory Brief

IT Act 1961 → 2025 / Section 87A

Tax rates & regime

Section 87A → Section 156

Rebate of income-tax for resident individuals with lower income

Section 87A of the old Income-tax Act, 1961 · new section 156 under the Income-tax Act, 2025

New reference Section 156

Income-tax Act, 1961Section 87A

  • Old regime: rebate up to ₹12,500 where total income does not exceed ₹5 lakh
  • New regime (from FY 2025-26): rebate up to ₹60,000 where total income does not exceed ₹12 lakh
  • Marginal relief where income slightly exceeds ₹12 lakh under the new regime

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 156

  • Same rebate, now section 156
  • 156(1): ₹12,500 rebate up to ₹5 lakh total income
  • 156(2): ₹60,000 rebate up to ₹12 lakh under the new regime (section 202(1)), with marginal relief
  • Rebate is not allowed against tax on LTCG on listed equity under section 198 (see 198(7))

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered. The ₹12 lakh / ₹60,000 new-regime rebate and the ₹5 lakh / ₹12,500 old-regime rebate carry over unchanged.

Practice notes

  • Available only to resident individuals, not HUFs or non-residents.
  • 'No tax up to ₹12 lakh' applies to normal-rate income; special-rate income such as capital gains needs care.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

Is income up to ₹12 lakh tax-free under the new Income Tax Act 2025?

Under the new regime, a resident individual with total income up to ₹12 lakh gets a rebate of up to ₹60,000 under section 156(2), so no tax is payable on normal-rate income. Special-rate income such as capital gains needs separate checking.

What is section 87A called in the new Income-tax Act, 2025?

Section 87A of the Income-tax Act, 1961 corresponds to Section 156 of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 87A under the new Income Tax Act?

Renumbered. The ₹12 lakh / ₹60,000 new-regime rebate and the ₹5 lakh / ₹12,500 old-regime rebate carry over unchanged.

Is section 87A still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 87A of the 1961 Act. Section 156 of the 2025 Act applies from tax year 2026-27.

Related sections

115BAC→202New tax regime (default) for individuals, HUFs, AOPs, BOIs and artificial juridical persons112A→198Tax on long-term capital gains from listed equity shares, equity mutual funds and business trust units (STT paid)80C→123Deduction for life insurance, PF, PPF, ELSS, tuition fees, home-loan principal and other specified savings