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No, “no tax up to ₹12 lakhs” does not mean that there is absolutely zero tax on all incomes up to ₹12 lakhs. Simply, if you have income of ₹12 lakhs, tax of ₹60,000 will be computed (excluding Cess) and the entire tax amount of ₹60,000 will be deducted as rebate u/s 87A.
No. If your taxable income exceeds ₹12 lakhs, you lose the Section 87A rebate, meaning you will have to pay tax on your income as per the slab rates.
If your net taxable income surpasses ₹12 lakh, the applicable tax rates from the revised slabs will apply to your entire income. For instance, if your income is ₹13 lakh, the first ₹4 lakh is tax-free, the next ₹4 lakh is taxed at 5%, the subsequent ₹4 lakh at 10%, and the remaining ₹1 lakh at 15%.
Yes, a salaried individual earning ₹12.75 lakh can pay zero tax under the new tax regime. This is possible due to the standard deduction and Section 87A rebate. Let’s break it down step by step:
Gross Salary = ₹12,75,000
Less: Standard Deduction = ₹75,000
Net Taxable Income = ₹12,00,000
Tax Calculation (as per slabs):
First ₹4,00,000 → 0% tax → ₹0
Next ₹4,00,000 (₹4,00,001 – ₹8,00,000) → 5% tax → ₹20,000
Next ₹4,00,000 (₹8,00,001 – ₹12,00,000) → 10% tax → ₹40,000
Total Tax Before Rebate = ₹60,000
Less: Section 87A Rebate = ₹60,000
Final Tax Payable = ₹0
No. The benefit of rebate u/s 87A is limited to resident individuals only. For nonresidents, you have to pay tax as per the applicable rates even if your income is below ₹12 Lakhs.
No, the benefit up to ₹12 lakh applies to “normal income,” such as salaries, business profits, interest, rental income etc. It does not cover special rate incomes like capital gains, lottery winning, etc. Which are taxed separately under different rules.
The proposals of budget 2025 are applicable for the financial year 2025-26, starting from April 1, 2025. Taxpayers will need to consider these changes when filing their returns for this period. Thus, it will applied only from the IT Return filing for the Assessment year 2026-27.
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JAKS has the best team of experts on board to serve you. Our finance and accounting services team is led by 17 experienced chartered accountants and financial advisors assisted by well trained and highly skilled team of 130+ professional staff to ensure best quality services to our clients. Our senior associates ensure that all our accountants are well trained in the use of all major accounting softwares and are updated with all recent changes in compliance requirements including IFRS and GAAP reporting standards.
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JAKS is equipped with an expert team of accountants, who are well trained to operate in all major accounting and payroll softwares. Some of the software packages we frequently use are Sage, Xero, Thomson Reuters, IRIS, QuickBooks, Quicken, MYOB etc. Our strong technology expertise at JAKS makes us capable to support any of the accounting softwares used by our clients.
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Outsourcing your services to a right outsourcing partner allow you to scale up your team with reduced staff costs and overheads. The facility provides you access to skilled and qualified accountants, reduces turnaround time of jobs, increase in-house efficiency and helps you focus more on core activities enabling your organisation to grow faster.
You can outsource an entire process/project or specific tasks to JAKS, as per your requirements. Once you let us know your needs, we will work on how we can support you for your specific needs and suggest an appropriate custom workflow and a pricing model.