India, Feb. 20 -- The calculation of tax rebates continues to be unclear when it comes to income from capital gains. This issue arises following finance minister Nirmala Sitharaman's decision to increase the tax-rebate threshold under Section 87A of the Income Tax Act from Rs.7 lakh to Rs.12 lakh in the Union Budget 2025-26.

When taking into account, the standard deduction of Rs.75,000, the actual threshold becomes Rs.12.75 lakh for salaried individuals.

However, this raises the question of what happens if a person with a Rs.12 lakh salary earns an extra Rs.1 lakh from capital gains.

"Since capital gains are classified as special-rate income, they do not qualify for the rebate," Live Mint reported quoted V Rajitha, the official spokesp...