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ITR Filing 2026: The Income Tax Department has released ITR forms ranging from ITR-1 to ITR-5 for the Assessment Year 2026-27 (Financial Year 2025-26). Additionally, Excel utilities for ITR-1, ITR-2, ITR-3, and ITR-4 have been made available. These allow taxpayers to fill out their returns offline first and subsequently upload them to the e-filing portal. The deadline for filing ITR is July 31.

If you are filing an ITR, it is important to understand the rules regarding the tax rebate available under Section 87A.

What is the Section 87A rebate?

Updated: June 29, 2026, at 7:41 AM
The rebate available under Section 87A is deducted directly from your total tax liability. It differs from a tax exemption or tax deduction. Its objective is to provide tax relief to low- and middle-income individuals.

How much rebate can you get?

If you have opted for the old tax regime and your taxable income is up to ₹5 lakh, you can avail a maximum rebate of ₹12,500.

If you opt for the new tax regime and your taxable income is up to ₹12 lakh, you can avail a rebate of up to ₹60,000.

It is important to note that this rebate applies to the tax amount calculated *before* the addition of the 4% health and education cess.

Who is eligible for this benefit?

The benefit of Section 87A is available only to individual taxpayers. This means that companies, HUFs (Hindu Undivided Families), and NRIs cannot avail of this benefit.

Additionally, this rebate does not apply to the tax payable on Long-Term Capital Gains (LTCG) or Short-Term Capital Gains (STCG) arising from the sale of shares. This benefit is also not available for income from sources subject to special tax rates, such as lotteries or game shows.

How do you claim the rebate in your ITR?

First, calculate your gross total income for the entire year. Next, deduct applicable exemptions and deductions to arrive at your taxable income. Enter this taxable income in your ITR. If your income falls within the specified limit, claim the rebate under Section 87A. The Income Tax Department offers this facility for ITR-2 and ITR-3 forms as well.

What is marginal relief?

Under the new tax regime, if your income slightly exceeds ₹12 lakh and the tax payable on it is higher than the additional income earned above the ₹12 lakh mark, you are eligible for marginal relief.

For instance, suppose your taxable income is ₹12.15 lakh—that is, ₹15,000 above the ₹12 lakh threshold. Under standard rules, the tax payable on this amount would be ₹62,250.

However, with marginal relief, your tax liability drops to just ₹15,000. After adding the 4% Health and Education Cess, your total tax liability decreases from ₹62,250 to ₹15,600.

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