Income Tax on ₹12.75 Lakh Taxable Income — Where Relief Runs Out
At ₹12,75,000 taxable income, Section 87A marginal relief is already redundant — plain slab tax (₹71,250, ₹74,100 after cess) is lower than the excess-over-₹12,00,000 figure, so the min() rule resolves to the ordinary slab tax.
Your Details
Old Regime Deductions
Total: ₹0HRA exemption is not available under the new regime — it only affects the old-regime column.
Comparison
| Component | New Regime | Old Regime |
|---|---|---|
| Gross Income | ₹12,75,000 | ₹12,75,000 |
| Total Deductions | ₹0 | ₹0 |
| Taxable Income | ₹12,75,000 | ₹12,75,000 |
| Income Tax | ₹71,250 | ₹1,95,000 |
| Rebate u/s 87A | ₹0 | ₹0 |
| Surcharge | ₹0 | ₹0 |
| Health & Ed. Cess | ₹2,850 | ₹7,800 |
| TOTAL TAX PAYABLE | ₹74,100 | ₹2,02,800 |
New Regime
Old Regime
Recommendation
New regime saves you ₹0 this year.
The new regime wins here because your old-regime deductions (₹0) are below the ~₹4,81,248 break-even where the old regime starts to pay off.
Client summary
Income Tax Regime Comparison
FY 2026-27 (AY 2027-28) · Income-tax Act 2025
| Component | New Regime | Old Regime |
|---|---|---|
| Gross Income | ₹12,75,000 | ₹12,75,000 |
| Taxable Income | ₹12,75,000 | ₹12,75,000 |
| Total Tax Payable | ₹74,100 | ₹2,02,800 |
The new regime wins here because your old-regime deductions (₹0) are below the ~₹4,81,248 break-even where the old regime starts to pay off.
Estimate for planning purposes — confirm with a CA before filing. practiceflow.in/tools/income-tax-calculator
Why marginal relief no longer changes this figure
At ₹12,75,000 taxable income, the excess over ₹12,00,000 is ₹75,000 — but the ordinary slab tax on this income is only ₹71,250, already lower than that excess figure. Since Section 87A caps tax at min(slab tax, excess), and slab tax is now the smaller of the two, the min() resolves to plain slab tax. Relief hasn't been "switched off" — it's simply no longer the binding constraint.
This crossover happens at roughly ₹12,70,588 taxable income under the current slab structure. ₹12,75,000 sits just past that point, so the payable tax here (₹74,100 after 4% cess) is the ordinary slab-rate figure, not a relief-discounted one.
The rule, precisely
Let T be the slab tax on taxable income X, and E = X − ₹12,00,000. Tax payable = min(T, E). At ₹12,75,000 taxable income, T = ₹71,250 and E = ₹75,000, so tax payable is the smaller of the two: ₹71,250. This holds for every taxable income from ₹12,00,001 up to roughly ₹12,70,588, beyond which plain slab tax is already lower than E and the relief becomes redundant on its own.
Applying this correctly matters because the error runs in only one direction — a calculator that skips marginal relief always overstates the tax due in this band, never understates it. For a salaried employee checking whether their employer's TDS calculation is right, or a CA sanity-checking a client's provisional tax, that overstatement is exactly the kind of number that erodes trust once someone works out the correct figure by hand.
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Why this matters
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See PracticeFlow for CA FirmsEstimate for planning purposes, not tax advice — always confirm with a CA before filing.