u/smaa56

If I have:

- ₹9L business profit (under Sec 44AD)

- ₹2.5L interest income

- ₹2L short-term capital gains (equity)

Total income becomes ₹13.5L.

I understand equity STCG is taxed separately at 20%, so tax on ₹2L STCG would be around ₹40K.

My confusion is regarding Section 87A rebate under the new regime (FY 2025-26):

Since my normal income (business + interest) is ₹11.5L, which is below the ₹12L rebate limit, will I still get rebate on that ₹11.5L and only pay tax on the STCG?

Or will the ₹2L STCG also be counted for rebate eligibility, making total income ₹13.5L and therefore making the ₹11.5L normal income taxable too?

Getting conflicting answers online, so wanted clarity from professionals.