Section 156
Section 156: income-tax rebate for resident individuals
Section 156 is the Income-tax Act, 2025's version of the rebate long known as "87A" - it doesn't reduce your income, it reduces the tax you actually pay, effectively making tax payable nil (or close to it) for individuals below a certain income threshold. The section works together with Section 155, which sets the general framework that this rebate is deducted from tax payable, capped at the tax otherwise due.
Rebate under the general (old-regime) slabs
A resident individual is entitled to a rebate of 100% of the income-tax payable, or ₹12,500, whichever is less, if their total income does not exceed ₹5,00,000.
Rebate under the default new-regime rates (Section 202(1))
Where the individual's income is taxed under the default new-regime rates in Section 202(1), a different, more generous rebate applies:
- If total income does not exceed ₹12,00,000: rebate of 100% of the income-tax payable, or ₹60,000, whichever is less.
- If total income exceeds ₹12,00,000 and the tax payable on it exceeds the amount by which income exceeds ₹12,00,000: a marginal-relief rebate equal to that excess tax amount, so tax payable doesn't jump disproportionately just past the ₹12,00,000 mark.
Key point
The deduction under Section 156 can never exceed the income-tax otherwise payable on the total income for the year - it can bring tax down to nil, but doesn't create a refund of tax not otherwise owed.
Frequently asked questions
Is this the rebate people call "87A"?
Yes - the same low-income rebate mechanism, now numbered Section 156 under the Income-tax Act, 2025, with different limits depending on which tax regime (old-style slabs or the Section 202(1) default rates) applies to you.
What's the maximum rebate under the new-regime rates?
₹60,000, if total income does not exceed ₹12,00,000 - plus a marginal-relief rebate for income just above that threshold, so the tax increase doesn't outpace the income increase.
Does this rebate apply to non-residents?
No - Section 156 is limited to an individual who is resident in India.
Can this rebate make my tax liability negative (a refund)?
No - the rebate is capped at the income-tax otherwise payable on your total income; it can reduce tax to zero but not below zero.
Want this applied to your actual filing, not just explained?
Check whether the Section 156 rebate applies to youLast updated 9 September 2026