Section 87A Rebate on Capital Gains Tax Under the New Tax Regime: What Taxpayers Must Know in 2026

  What is a Tax Residency Certificate (TRC), and how can it be obtained in India? Indian residents earning income abroad and non-residents earning in India may face double taxation. To avoid this, double taxation avoidance agreements exist. Tax residency certificates are required to prove residency and claim benefits. A Double Taxation Avoidance Agreement (DTAA) helps prevent the same income from being taxed in both countries. To claim DTAA benefits, taxpayers must prove their country of tax residence through a Tax Residency Certificate (TRC). In India, the Income Tax Department issues the TRC, confirming that a person is an Indian tax resident for a specific financial year. Who pays taxes in India? In India, taxes are paid by individuals, businesses, and other entities that earn income or make taxable transactions. Indian residents pay tax on their global income, while non-residents are taxed only on income earned or received in India. Individuals such as salaried employees, profe...

The Section 87A rebate on capital gains has become a hot topic among salaried individuals, investors, and tax professionals in India. With the government promoting the new tax regime as simplified and taxpayer-friendly, many assume that all income, including capital gains, qualifies for rebate benefits. However, recent amendments and clarifications from the Income Tax Department have changed the tax treatment significantly. If you invest in shares, mutual funds, or property, understanding how capital gains tax interacts with Section 87A under the new regime is crucial. Incorrect assumptions while filing your Income Tax Return (ITR) can lead to tax notices, interest penalties, or refund delays. What is Section 87A Rebate? Section 87A rebate is a tax relief available to resident individuals whose taxable income is below a specified threshold. Under the revised new tax regime, taxpayers can claim a maximum rebate of ₹60,000 if their total taxable income does not exceed ₹12 lakh. This reb...