14/11/2025
*Zero Tax up to Rs. 12.75 Lakh, But Short-Term Capital Gains Aren't Exempt! 🚨*
The Union Budget 2025 has brought relief to salaried individuals, exempting income up to Rs. 12.75 lakh from tax under Section 87A. However, there's a catch - Short-Term Capital Gains (STCG) on equity shares or mutual funds aren't eligible for this rebate and are taxed at a flat 15% rate.
*Key Points:*
- *Section 87A Rebate*: Applies only to income taxed under normal slab rates, not special rate incomes like STCG, LTCG, or business income.
- *STCG Taxation*: Taxed at 15% flat rate, regardless of total income or 87A rebate eligibility.
- *Examples*:
- Salary: Rs. 10 lakh + STCG: Rs. 2 lakh = Tax on STCG: 15% of Rs. 2 lakh = Rs. 30,000.
- Only STCG: Rs. 4 lakh = Tax: 15% of Rs. 4 lakh = Rs. 60,000 + cess.
- *Why Excluded?*: Prevents misuse, ensures fair tax revenue, and maintains market discipline.
*Implications:*
- Salaried individuals with no trading income benefit from zero tax up to Rs. 12.75 lakh.
- Investors and traders must pay STCG tax separately, without rebate benefits.
Consult a tax expert for personalized advice.
