New tax rules: The Rs 60,000 rebate only works for regular income, not short-term capital gains.

If my total income from all sources is less than Rs 12 lakh and I have capital gains on listed shares and equity mutual funds—Rs 60,000 as short-term capital gains and Rs 1 lakh as long-term capital gains—am I eligible for the tax rebate under Section 87A under the new tax regime for the current financial year? 

Expert's Advice: Section 115BAC is the new tax law for people, HUFs, and groups of people.  It has lower slab rates for normal income, but people who choose it can't claim a number of exemptions and deductions, such as HRA, LTA, and deductions under Sections 80C, 80CCD, 80G, 80TTA, and 80TTB, to name a few.

Taxpayers can now get a bigger rebate of Rs 60,000 under Section 87A, up from Rs 12,500 under the old system.  You can only get this rebate if your normal income is less than Rs 12 lakh.  You can't use the rebate to lower your tax bill on income that is taxed at special rates. When figuring out if someone is eligible for Section 87A under the new rules, only normal income is counted. Income taxed at special rates is not counted, no matter how much it is.