Rebate Under Section 87A

Manshi Baid

The government provided relief to the resident individuals by inserting Section 87A of the Income Tax Act, 1961 via Finance Act, 2013. This section provides tax relief to the Resident Individuals belonging to the lower income bracket. The relief is provided by way of rebate in the income tax payable on the total income by the resident individual. The learned author illustrates, computation of rebate under Section 87A.

The rebate is provided subject to certain terms and conditions and up to a certain limit. The limit and conditions are as follows :

1. From assessment year 2014-15 to assessment year 2016-17

Condition

(i) Total Income should not exceed Rs. 5,00,000 during the year under consideration.

(ii) Assessee should be a resident individual.

Limit : Rebate was of Rs. 2,000 or 100% of income-tax, whichever is lower.

2. For assessment year 2017-18

Condition

(i) Total Income should not exceed Rs. 5,00,000 during the year under consideration.

(ii) Assessee should be a resident individual.

Limit : Rebate was of Rs. 5,000 or 100% of income-tax, whichever is lower.

3. For assessment year 2018-19

Condition

(i) Total Income should not exceed Rs. 3,50,000 during the year under consideration.

(ii) Assessee should be a resident individual.

Limit : Rebate was of Rs. 2,500 or 100% of income-tax, whichever is lower.

4. For assessment year 2019-20

Condition

(i) Total Income should not exceed Rs. 3,50,000 during the year under consideration.

(ii) Assessee should be a resident individual.