Answer

ITR

NRIs do not get the Sec 87A rebate

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  1. Facts

    The Sec 87A rebate, which makes income up to ₹12 lakh tax free under the new regime for FY 2025-26, is only for resident individuals. NRIs pay tax as per slabs without that rebate.

  2. Provisions and law

    • Sec 87A, Income-tax Act 1961 (now Sec 156, Income-tax Act 2025)Rebate of tax for resident individuals with income up to the set limit.
    • Sec 115BAC, Income-tax Act 1961 (now Sec 202, Income-tax Act 2025)New tax regime slabs and conditions.

  3. Analysis

    Say your Indian income is ₹10 lakh under the new regime. Slab tax is ₹40,000 plus cess. A resident would get a rebate and pay nil; an NRI pays about ₹41,600. Plan for this when estimating refunds.

  4. Conclusion

    1. Compute slab tax on Indian income.
    2. Do not apply the rebate as an NRI.
    3. Compare old and new regime.
    4. File ITR-2.

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