How the ₹12 lakh rebate interacts with standard deduction

Rebate looks at taxable income, not CTC

Under the new regime for Tax Year 2026-27 (FY 2026-27, AY 2027-28), resident individuals can see tax brought down by the section 87A rebate when taxable income is within the ₹12 lakh band (with marginal relief just above). Taxable income is after allowed deductions—not the offer-letter CTC.

For salaried people the new-regime standard deduction is ₹75,000. That means gross salary around ₹12.75 lakh can still land at about ₹12 lakh taxable before other adjustments, which is why "₹12 lakh salary" and "₹12 lakh taxable" get confused in casual talk.

What still sits outside this shortcut

Special-rate income, capital gains, and some business situations do not behave like simple salary for the rebate story. Employer NPS under 80CCD(2) can still reduce taxable salary in the new regime; classic 80C and HRA generally do not. The income-tax calculator on this site models the common salaried compare—it is not a full ITR engine.

Check your own gross once

Enter gross salary and the new regime in the calculator. Note taxable income after standard deduction and whether tax is nil inside the rebate band. Then nudge salary up a little to see marginal relief behaviour near the edge. Use that as planning, then match it to payroll and Form 16 when you file.