₹12 lakh income? No tax.
₹12,10,000 income? ₹61,500 tax?
What happens if your income exceeds ₹12 lakh by just ₹1?
Did you know that earning just ₹1 extra above ₹12 lakh could shoot up your tax liability disproportionately?
That’s where Marginal Relief comes in!
It's a benefit under Section 87A read with Section 115BAC(1A) that prevents taxpayers from paying excessively high taxes just because their income slightly exceeds the tax exemption threshold.
Imagine you earn ₹12,10,000—just ₹10,000 over the threshold. Your tax shoots up to ₹61,500!
But Marginal Relief adjusts this. Instead of paying ₹61,500, you only pay ₹10,000, saving a whopping ₹51,500!
→ Applicable to resident individuals under the new tax regime.
→ Taxpayers with income up to ₹12 lakh pay zero tax under the new regime.
→ If your income exceeds ₹12 lakh but stays below ₹12.75 lakh, you get relief.
→ Beyond ₹12.75 lakh, no marginal relief is available.
→ Marginal relief does not apply to special income like capital gains, lottery winnings, etc.
Section 87A read with Section 115BAC(1A) ensures a fair tax structure so that minor income jumps don’t cause excessive tax burdens!
Are you making the most of Marginal Relief?