Income up to ₹12L was made tax-free in the budget. Is this benefit available for all types of income? My income is ₹7L salary and ₹5L capital gains from stocks, as it is within ₹12L, I won’t be paying any tax right?
Another doubt was, what if someone has only capital gains from stock market investments? In that case also no tax up to ₹12L?
In the Union Budget 2025, FM announced significant changes to the income tax structure and increased the rebate threshold under section 87A from ₹7 lakh to ₹12 lakh.
However, this rebate doesn’t apply to capital gains. If you’re making money from selling stocks, mutual funds, or even property, you’ll still have to pay tax on those profits.
This is because these are special-rate incomes i.e. they are taxed at a fixed rate and not as per income slabs.
Here’s a table to summarise rebate availability on various incomes.
Now, as the rebate is only available on incomes taxed at normal slab rates, you’ll get a rebate on this if such income is within the ₹12L threshold.
However, you’ll have to pay tax on special rate incomes.
In case short-term capital gains from an investment are taxable at slab rate (like in case of real estate & gold), you will get the benefit of tax rebate on those gains.
In your case, the ₹7L salary will be tax-free due to the rebate, but capital gains will be taxable based on whether they are LTCG or STCG.
If we take a couple of more examples like these,
₹11L as salary and other normal rate income + ₹3L capital gains:
Despite the total income being more than ₹12L, you get a full rebate on salary and capital gains will be taxable.
₹7L as salary and other normal rate income + ₹3L capital gains:
Even if total income is less than ₹12L, you get a rebate only on salary and capital gains will be taxable.
This rebate applicability sparked a lot of confusion last year and finally got a much-needed clarification in the recent budget.
What is included in “other capital assets” under LTCG from gold and other capital assets?
Hi @ankitdas123,
Other capital assets include assets like jewellery, paintings etc.
Let’s say I generate 12 lakhs yearly from a debt fund with no other income or gains. How much in taxes will I have to pay under the new tax slabs?
I searched online, but the articles are outdated. Do the gains from the debt fund are taxed as long-term gains tax rates or normal tax rates? Will I get the rebate or not?
very good Question, Pl keep in touch with me
Jumani 9940045321 chaittanyafin@gmail.com
thanks
Hi @Johnny_Boy,
Debt funds purchased after 1st April 2023 will be taxed at slab rates irrespective of whether the gains are long-term or short-term.
As per my understanding, you will get the rebate benefit on these gains and hence will have to pay no tax on income up to ₹12L.
@Surbhi_Pal Hello madam, in case for FY 2024-25, Other income 4.5L+STCG 1.5L=Total 6L, is person eligible for getting Rebate under 87a(new Regime) for STCG?
will his effective income tax liability become Zero?
It is confusing becuase this matter of rebate for STCG, LTCg was pending but Bombay High court recently gave relief to taxpayers as IT department declined rebate last year.
You need to pay Capital Gain Tax on 5 Lakhs.
Even if income from Capital Gain is upto 12 Lakhs , you need to pay tax on Capital Gain .
For better understanding , you may refer the article dated 11.02.2025 on Tax Guru: - "Nil Tax Up To Rs. 12 Lakhs Income (FY 2025-26); Tax Computation With Illustrations & FAQs "( Link is provided)
Nil Tax Up To Rs. 12 Lakhs Income: Tax Computation With Illustrations & FAQs
@anitabhadra what about FY2024-25? pls check my post above.
Sorry , this reply was in response to: query posted by Mr. Yash Chaudhari .
Regarding your query , taxpayers were allowed to file revised return and claim rebate under section 87A . Last date to file revise return for 2024-25 was 15.01.2025
ok .i guess last date to file ITR for FY 2024-25 is 29 july 2025. can we claim rebate for current FY?
No rebate allowed on special rate income.
In your case,STCG@20.8% Taxable
For AY 2025-26 ( FY 2024-25) , ITR filing date would be 31st July 2025 . There is no change in claiming rebate under section 87A for that period .
It was due to utility error in AY 2024-25 ( FY 2023-24) , all the chaos happened and Bombay High Court extended the date to file revised return by 15.01.2025.
