Resident-Individual Tax Rebate Explained for Tax Year 2026–27

At or below ₹12 lakh, an eligible resident individual may receive a rebate

For Tax Year 2026–27, section 156 of the Income-tax Act, 2025 allows a resident individual whose total income is chargeable under the section 202 new regime a rebate equal to the eligible calculated tax, capped at ₹60,000, when total income does not exceed ₹12,00,000. This is the current counterpart of the rebate previously associated with section 87A of the Income-tax Act, 1961.

Within this calculator's supported ordinary slab-income scenario, slab tax at ₹12,00,000 is ₹60,000 and the ordinary rebate reduces it to zero before cess. The threshold is not the same as a universal promise of zero tax: the provision and the calculator scope concern eligible ordinary slab-rate income, while special-rate income and other unsupported circumstances can change statutory liability.

What happens at and above ₹12 lakh

The examples below come directly from the current Income Tax engine. Marginal relief limits tax after relief to the amount by which income exceeds ₹12 lakh while the ordinary slab tax is higher than that excess.

Marginal relief softens the threshold

At ₹12,00,001, ordinary rebate is zero, but marginal relief reduces ₹60,000.15 of slab tax by ₹59,999.15. Tax after relief is ₹1; 4% cess is ₹0.04; the final estimate is ₹1.04.

At ₹12,50,000, marginal relief is ₹17,500 and tax after relief is ₹50,000. Near the crossover, ₹12,70,588 still receives ₹0.20 of marginal relief. In plain language, the relief limits the modeled tax increase just above the threshold to the income above ₹12 lakh until the ordinary slab tax is no higher than that excess.

Relief comes before cess

Cess is calculated on tax after the applicable rebate or marginal relief. The 4% cess explanation shows this order separately.