Under the new regime, income up to ₹12 lakh pays nil tax after the rebate. Marginal relief ensures that just above ₹12 lakh, your extra tax is capped to roughly the amount by which income exceeds ₹12 lakh — so a small overshoot doesn't cost you a huge jump.
Without relief, crossing ₹12 lakh by even ₹10,000 could trigger tax on a large slice of income — a cliff edge. Marginal relief smooths that edge.
Just above ₹12 lakh, your tax is limited to the amount of income over ₹12 lakh. So at ₹12,10,000, the tax is capped near ₹10,000 (the excess), not the full computed tax.
At ₹12,00,000 → tax nil (rebate). At ₹12,50,000, the normally-computed tax would be much higher, but marginal relief caps the extra tax to about ₹50,000 (the income above ₹12 lakh). The benefit tapers off by roughly ₹12.75 lakh.
Anyone earning just over ₹12 lakh on the new regime — and a reason to time bonuses and use employer NPS to stay near the line.
Our CAs work out exactly how much you can save and file it correctly.
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