115BAC RESIDNT INDIVISUAL TOTAL INCOME UPTO 700000 FOR A.Y 25-26

[Fahiyaz Ahmmed]

• Has the CBDT issued any specific clarification or circular for AY 2025-26 on the quantum of rebate u/s 87A under Section 115BAC?

• Should the rebate be interpreted strictly as 100% of tax payable (Rs. 20,000) in this case, subject to the ceiling of Rs. 25,000?

• For examination and practical purposes, is it correct to conclude that tax becomes NIL due to the rebate of Rs. 20,000, not Rs. 25,000?

• LIKE UPTO 300000- NIL FOR A.Y 25-26

• 300000 - 700000= 400000*5%= 20000

AI Summary

Section 87A rebate for new tax regime (115BAC) in AY 2025-26: whether income up to ?7 lakh means nil tax The discussion concerns the quantum and application of the rebate under section 87A for a resident individual opting for the section 115BAC regime for AY 2025-26 where total income does not exceed ?7,00,000. It queries whether any CBDT clarification/circular exists for AY 2025-26 on section 87A rebate under section 115BAC, and whether the rebate must be computed as 100% of the tax payable (here, ?20,000 on income above the nil-rate slab) subject to the statutory cap of ?25,000. It further posits that, if so applied, the rebate would reduce the tax liability to nil by allowing ?20,000 (not ?25,000).