Income Tax New Rules: Under the new tax regime in Budget 2025, zero tax has been declared on annual income up to Rs 12 lakh under section 87A. Earlier this exemption was available on income up to Rs 7 lakh, which has now been increased to Rs 12 lakh.
Income tax New Rules: Important changes have been made in the budget for taxpayers under the new tax regime. In this, special tax exemption (rebate) has been increased on income up to Rs 12 lakh and it has been completely exempted from tax. To provide relief to taxpayers, the government gives special exemption (rebate) on the total payable income tax under section 87A. Earlier in the new tax system, rebate of up to 25 thousand was available, which has been increased. Whereas, in the old tax regime, a rebate of Rs 12,500 is available.
1. How does this section benefit the taxpayer?
Answer: Under the new tax system in Budget 2025, zero tax has been declared on annual income up to Rs 12 lakh under Section 87A. Earlier this exemption was available on income up to Rs 7 lakh, which has now been increased to Rs 12 lakh.
2. Was there any change in rebate in Budget 2025?
Answer: In the new tax system, the limit of rebate has been increased from 25,000 to 60 thousand rupees. The taxpayer will get a maximum rebate of 60 thousand on income up to 12 lakhs.
3. What is the procedure a taxpayer should follow to avail the rebate?
Answer: Any taxpayer with an annual income of up to Rs 12 lakh can get special tax rebate. To avail this benefit, ITR has to be filed under the new tax regime.
4. Are special rate income like capital gains, lottery etc. also eligible for exemption?
Answer: There is no exemption available on capital gains or income from lottery or any other assets. There will be no benefit of rebate under section 87A on these. Tax will have to be paid for these as per the prescribed rates.
5. Is there any change in the rebate available in the old tax regime?
Answer: There is no change. Only a special tax exemption of Rs 12,500 will be given on income up to Rs 5 lakh.
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