How Does Section 87A Marginal Relief Work?
Earning just above the ₹7.75 Lakh tax-free threshold? Discover how the Indian Income Tax Act guarantees you never pay more in new tax than your actual raise.
Tapered Tax Calculations from ₹7.75 Lakhs to ₹8.05 Lakhs
| Gross Salary | Taxable Income | Excess Over ₹7L | Raw Slab Tax | Relief Granted | Final Tax (+Cess) |
|---|---|---|---|---|---|
| ₹7,75,000 | ₹7,00,000 | ₹0 | ₹20,000 | ₹20,000 (Full 87A Rebate) | ₹0 |
| ₹7,80,000 | ₹7,05,000 | ₹5,000 | ₹20,500 | ₹15,500 (Marginal Relief) | ₹5,200 |
| ₹7,85,000 | ₹7,10,000 | ₹10,000 | ₹21,000 | ₹11,000 (Marginal Relief) | ₹10,400 |
| ₹7,95,000 | ₹7,20,000 | ₹20,000 | ₹22,000 | ₹2,000 (Marginal Relief) | ₹20,800 |
| ₹8,05,000 | ₹7,30,000 | ₹30,000 | ₹23,000 | ₹0 (Normal Slabs Apply) | ₹23,920 |
Simulate Section 87A Marginal Relief
Enter any salary between ₹7,75,000 and ₹8,20,000 to see exact marginal relief calculations in real-time.
Estimated monthly credit in bank under NEW Tax Regime (FY 2025-26).
Annual CTC distribution
NEW Tax RegimeTax Comparison (New vs. Old Regime)
Budget 2024 revised slabs vs. Old Regime deductions for ₹₹7,80,000 CTC
New Tax Regime
FY 25-26Old Tax Regime
TraditionalFrequently Asked Questions: Section 87A Marginal Relief
Clear answers to common questions on CTC structure, take-home calculations, Budget 2024 tax slabs, and Section 87A rebate rules.
Why was Section 87A Marginal Relief introduced in the New Tax Regime?
Before marginal relief was codified in the proviso to Section 115BAC(1A), a severe 'tax cliff' existed: earning ₹7,00,000 resulted in ₹0 tax, but earning ₹7,00,100 caused the entire ₹20,000 rebate to vanish, creating over ₹20,000 in tax for just ₹100 extra income. Parliament enacted marginal relief to ensure that the income tax payable cannot exceed the excess amount of taxable income over ₹7,00,000.
At what salary does Section 87A marginal relief taper out completely?
Marginal relief tapers out when normal slab tax becomes equal to or lower than the excess income over ₹7,00,000. Under current Budget 2024 slabs, this crossover point occurs at exactly ₹7,27,778 of net taxable income (or ~₹8,02,778 gross salary for salaried employees with ₹75,000 standard deduction). Beyond this point, normal slab taxation applies.
Does Old Tax Regime offer marginal relief for the ₹5 Lakhs threshold?
No. The Old Tax Regime does NOT offer marginal relief under Section 87A. Under the Old Regime, if your taxable income after deductions is ₹5,00,000, tax is ₹0; but if taxable income is ₹5,00,050, you lose the entire ₹12,500 rebate and must pay the full ₹12,500 tax plus cess.