Section 87A rebate can be claimed against tax liabilities on the following income:-

• Income on which tax is calculated as per the slab rate.
• Long-term capital gains under Section 112 of the Income Tax Act other than listed equity shares and equity-oriented schemes of mutual funds.
• Short-term capital gains under Section 111A for listed equity shares and equity-oriented schemes of mutual funds on which tax is payable at a flat rate of 15%.

Please note that-

• Hence Rebate u/s 87A is not available on sale Long-term capital Gain from equity shares & equity oriented mutual fund as specified under section 112A.
• It is available on all other capital gains.
• Hence Rebate u/s 87A is also available against winning from lotter, winning or cross word puzzles etc. (for example, if total income of a resident individual is Rs. 100000/- for FY 22-23. He is not having any other income , then as we know that basic exemption limit not allowed against lottery income then his taxable income comes to rs. 100000/- taxable @ 30%. Total tax is Rs. 30000/-. Now rebate u/s 87A of rs. 12500/- (tax or 12500/- whichever is less) is available to this individual and he is required to pay only balance tax i.e. 30000-12500 =17500 (EC & HEC extra).
• A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.
• For the FY 2023-24(AY 2024-25), the rebate limit has been increased to Rs. 7,00,000 under the new tax regime. This means a resident individual with taxable income up to Rs 7,00,000 will receive Rs 25,000 or the amount of tax payable (whichever is lower) as tax relief. However, for the old tax regime, the threshold limit will remain the same, i.e.12,500 for income up to Rs 5,00,000.
• Please note that the Basic exemption limit is not available against lottery income or other income of the same nature. In case of capital gain basic exemption income is available at after adjusting other incomes against basic exemption.