The Budget 2017 has reduced the tax rebate under section 87A to Rs 2,500 from the previous Rs 5,000. Moreover, this rebate will be available only to persons earning up to Rs 3.5 lacs.
This will either reduce their tax liability to zero or at least by 50%. Hence this is a welcome move. Even if you earn up to 4.5 lakhs and exhaust the limit of 1.5 lakhs available in section 80C deductions then you do not pay any tax.