Marginal Relief Calculator
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Runs entirely in your browser — your numbers never leave this page.
How it works
The ₹12 lakh rebate creates a cliff: at ₹12,00,000 you pay zero, but at ₹12,00,001 the normal slabs would demand ~₹60,000+. Marginal relief smooths it — your tax is capped at the amount by which your income exceeds ₹12 lakh. Earn ₹12.5L, pay at most ₹50,000.
The relief is automatic but invisible — your ITR software applies it, and many taxpayers never notice the line item. It phases out on its own: once normal slab tax drops below the excess (around ₹13.2L), the regular calculation takes over.
Planning note: if you are near the line, a little extra 80C/NPS deduction (old regime) or timing income can still matter — but the cliff itself will not punish you anymore.
Frequently asked questions
What is marginal relief?
A rule ensuring that when taxable income marginally exceeds ₹12 lakh (new regime), the tax payable cannot exceed the excess income. It removes the "rebate cliff" where ₹1 extra income cost ₹60,000 in tax.
Do I need to claim it separately?
No — it is computed automatically in the ITR utility when applicable. Just file under the new regime; the relief line appears in the computation.
Up to what income does it help?
Roughly ₹12L–13.2L. Beyond that, normal slab tax is lower than the excess-income cap, so relief becomes zero naturally.
Does it apply to capital gains?
No — marginal relief does not apply to income taxed at special rates (capital gains, lottery winnings). It covers only slab-rate income.
Old regime — any marginal relief?
The old regime's ₹5L rebate has a similar cliff but no statutory marginal relief provision; the new regime's relief is the cleaner deal here.
Is cess included in the cap?
The 4% health & education cess applies on the relieved tax amount. This calculator shows the final figure including cess.
Should I still try to stay under ₹12L?
Less critical now — the cliff is gone. But deductions still reduce real tax, so tax planning is not dead, just less dramatic near the line.
Does standard deduction count?
Yes — the ₹12L figure is taxable income AFTER the ₹75,000 standard deduction. So gross salary up to ₹12.75L can still pay zero tax.
What if my employer deducted excess TDS?
Claim the refund when filing — TDS follows payroll projections, while marginal relief applies at assessment. The refund comes to you.
Will this rule continue?
It is part of the Finance Act framework for the new regime and Budget 2026 left it untouched. Future budgets could revise the ₹12L threshold itself.