New tax AY26-27 onwards: If my normal income from FD, dividend, house rent combined is Rs 9 lacs and my LTCG is Rs 6 lac, aggregate of which is Rs 15 lacs and more than 12 lac (required for zero tax). Now, am I still eligible for zero tax (< 12 lac) on my normal income of Rs 9 lac.
Kindly clarify.
Hello @Uday_Konkankar
There are different opinions regarding a taxpayer’s eligibility for the Section 87A rebate when their total income, including special rate income such as long-term capital gains, exceeds ₹12 lakh, but the normal slab rate component alone remains within the rebate threshold. The Income Tax Department has yet to provide a clear stance on this rule to eliminate ambiguity.
Currently, the Income Tax Return (ITR) utility for FY 2023-24 on the income tax portal allows the rebate even if total income, including special rate income, exceeds the rebate limit, as long as the normal tax rate component remains within the prescribed limit. This suggests that the rebate has been permitted so far.
Therefore, a rebate on the ₹9 lakh of income should be allowed, making the tax liability on it zero, while the long-term capital gains will be taxed at 12.5%.
Hope this helps!
Thank you, very much.
