Check
out the Section 87A rebate for FY 2017-18 in the following section. The
Income Tax Rebate under Section 87A for AY 2018-19 is allowed as per the
following schedule for different Financial Years.
The
Union Budget 2017-18 proposed to be reduced to this rebate under section 87A to
Rs. 2,500, where the total taxable income does not exceed Rs. 3,50,000 from AY
2018-19.
Know
all about Section 87A: Income Tax Rebate allowed to Individuals in the
following section.
Financial Year
|
Rebate Amount
|
Applicable only if income less than
|
2017-18
|
Rs. 2500
|
Rs. 3.50 Lakhs
|
Section
87A of Income Tax Act, 1961 offers a Tax Rebate to Individuals earning Income
below the specified limit. This 87A Rebate would be given from the Total Tax
payable by an Individual. The Rebate under section 87A is relevant to note here
that this rebate is to be subtracted from the Total Taxable income and not from
the Total Income of an Individual. Learn the essentials of Income Tax
Rebate. Know all about Section 87A. Check Tax Rebate for the Individuals for
Assessment year 2017-18. For more details regarding Income Tax Rebate under
Section 87A, read the full article.
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What is Income Tax Rebate?
A Tax
rebate is an amount paid by way of reduction, return, or refund on what has
already been paid or contributed. The Income Tax Rebate in India is allowed for Individuals
whose income falls under the tax slabs. Tax rebate rates are updated for every
financial year as per the directions of the Indian government. The
modifications made in the rebate structure are announced in Union Budget of the
respective year.
Eligibility for Income Tax Rebate
With a view providing tax
relief to the individual assesses who are in lower income bracket a refund is
provided for under Section 87A.
The rebate will be available
if the assessee satisfies the following eligibilities.
1.
The Taxpayer is a resident individual( may be
an ordinary resident or not ordinary resident).
2.
The Total Income or taxable income (i.e. gross
total income minus deductions under Section 80C to 80U) is Rs.3,50,000/- or
less.
Income Tax Rebate Key Features
The following are the salient
features of Income Tax Rebate u/s 87A AY 2017-18.
·
Under Section 87A Tax Rebate is only available
to Individuals. All categories of Individuals whether female or male or Senior
Citizens are eligible to claim Income Tax Rebate as per Section 87A. The
taxpayer under the class like HUF, LLP, Partnership Firms, Companies,
LLP, etc. is not eligible to claim Income Tax Rebate under this section.
·
Income Tax Rebate u/s
87A is only available to Resident Individuals and not to Non-Resident
Individuals.
·
For Super Senior Citizen (Aged above 80 years)
There is no benefit of this Rebate as their Income up to Rs. 3,50,000/- is
already exempted from the levy of Income Tax.
Note: Rebate under Section
87A is not available for the case of a non-resident individual, resident or
non-resident HUF/ AOP/ BOI or any taxpayer other than a resident individual.
Tax Rebate for Senior Citizens
The Income
Tax Act, 1961 has made provisions
for tax rebates for senior citizens(aged over 65 years). The Section 88B
contains all details about such tax rebates. But, the most significant fact
about such rebates is that the individual concerned is entitled to receive
rebates till Rs. 20,000/- depending upon the amount of tax payable on him.
Note: Rebate benefits u/s 87Ais not
available to super senior citizens.
Income Tax Rebate Calculation
As
Section 87A provides for Income Tax Rebate, the assessee will first compute the
Total Tax Payable and then reduce Rs. 2,500/- from this Tax payable provided
his Total Income is less than Rs. 3,50,000/-. If taxpayer’s Total Income is
more than Rs. 3,50,000/-, then he won’t be able to claim income tax rebate
under Section 87A.
·
The Net Taxable Income of Rs. 3,50,000/- is
the total of incomes under all heads i.e. House Property, Salary, Capital
Gains, Business or Profession, and Other Sources.
·
In case, there is any loss under any head due
to the payment of housing loan or for any other reason, such loss would also be
deducted from the total income.
·
Tax Deductions from Section 80C to Section 80U under Chapter VI-A would also be
allowed, and the resultant figure i.e. Total Income should be less than Rs. 3,50,000/-
for an individual to claim income tax rebate of Rs. 2,500/- under Section 87A.