Question 1

What is standard deduction and who can claim it?

Accepted Answer

Standard deduction is a flat deduction from salary income available to salaried employees and pensioners. No proof or receipts are required. FY 2025-26: Rs 75,000 (new regime), Rs 50,000 (old regime).

Question 2

What is Section 87A rebate and how does it work?

Accepted Answer

Section 87A provides tax rebate for individuals with taxable income below certain limits. FY 2025-26 new regime: Rs 60,000 rebate for income up to Rs 12 lakh. Old regime: Rs 12,500 rebate for income up to Rs 5 lakh.

Question 3

Can I get partial 87A rebate if my income slightly exceeds the threshold?

Accepted Answer

No, Section 87A rebate is all-or-nothing. If your taxable income exceeds the threshold by even Rs 1, you lose the entire rebate. Plan your investments to stay within the threshold if you're close to the limit.

Question 4

Which regime is better - old or new for FY 2025-26?

Accepted Answer

New regime is better if your deductions are less than Rs 3-4 lakhs. With Rs 75,000 standard deduction and Rs 12 lakh rebate threshold, income up to Rs 12.75 lakh is effectively tax-free under new regime.

Standard Deduction & 87A Rebate

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