Incomes that are charged at a special rate, like long term capital gains and short term capital gains from listed equities, aren’t eligible for the Section 87A tax rebate to reduce income tax liability. But Indian residents and Hindu Undivided Families (HUFs) can benefit from the Rs 4 lakh basic exemption limit under the new tax regime, which helps in lowering capital gain tax liabilities.
Under the Income Tax Act, 2025, this provision has not been removed, this means that using the basic exemption limit to reduce capital gains tax liability is still an option for Tax Year 2026-2027.
