Marginal Relief Calculator

The rule

Section 87A's new-regime rebate makes taxable income up to ₹12,00,000 fully tax-free. Without a special provision, crossing that line by even ₹1 would mean paying the full slab tax on the entire income — a cliff-edge that could leave someone earning ₹12,00,001 worse off than someone earning ₹11,99,999. Marginal relief prevents that: for taxable income X above ₹12,00,000, let T be the ordinary slab tax on X and E = X − ₹12,00,000. Tax payable is min(T, E) — never more than the amount by which income actually exceeds the threshold.

This is a genuinely different computation from simply extending the rebate — it's a cap on the tax itself, recalculated at every income level rather than a fixed extra deduction.

Where the relief runs out

The relief is only relevant while E is smaller than T — once slab tax on its own drops below the excess-over-₹12L figure, the min() naturally resolves to plain slab tax and the "relief" stops changing anything, without needing a separate rule to switch it off. That crossover happens at approximately ₹12,70,588 taxable income for the current slab structure — derived from where the 15% slab rate above ₹12,00,000 makes T grow faster than E. This figure would shift automatically if the slabs ever changed, since it's a consequence of the slab rate, not an independently fixed number.