Example of Marginal Relief Under the New Tax Regime
| Particulars | Amount |
|---|---|
| Taxable Income | ₹12,10,000 |
| Income eligible for full rebate under Section 87A | ₹12,00,000 |
| Income exceeding rebate limit | ₹10,000 |
| Tax calculated as per slab rates (before rebate/marginal relief) | ₹61,500 (Illustrative) |
| Maximum tax payable after marginal relief | ₹10,000 |
How it works: Since your income exceeds the ₹12 lakh rebate threshold by only ₹10,000, the tax payable after applying marginal relief cannot exceed ₹10,000, even if the normal slab-based tax works out to a much higher amount.
Simple Formula
Tax Payable = Lower of:
• Tax calculated as per slab rates, or
• Income exceeding ₹12,00,000.
Tax Payable = Lower of:
• Tax calculated as per slab rates, or
• Income exceeding ₹12,00,000.
