“Understanding Section 87A Rebate: Strategies for Zero Tax Liability in Both New and Old Tax Regimes”

**Tax Relief Under Section 87A for Individual Residents**

The Indian tax framework provides a rebate under Section 87A for resident individuals whose total income falls below specified thresholds. This provision aims to alleviate the tax burden on lower-income earners.

Under Section 87A, the income tax liability (before applying any health and education cess) is first computed according to the prevailing tax rates. Once this preliminary tax amount is determined, taxpayers may qualify for a rebate, which directly reduces their total tax payable.

As of the financial year 2023-24, individuals earning an annual income up to ₹5 lakh can benefit from a full rebate, effectively resulting in a zero tax liability. For those with incomes exceeding this threshold, the rebate is gradually reduced. This mechanism serves as a significant financial relief for many taxpayers, encouraging compliance and contributing to the overall economic welfare of the country.

Taxpayers eligible for this rebate need to ensure that they file their income tax returns accurately to avail themselves of the benefits under Section 87A.