Income Tax Preparation software in Excel with Discount u/s 87A was introduced by the Government of
India in the year 2013-14. 87A discount benefits your tax liability. Rebates under Section 87A can be
claimed if your taxable income does not exceed the predetermined limit for the relevant financial year.
You can claim a maximum deduction
of Rs 12,500 under Section 87A of the Income Tax Act for the financial year
2022-23.
The maximum reduction amount of 87A
is adjusted from time to time. Initially, the maximum tax refund under Section
87A of the Income Tax Act was Rs 2,000. In the Union Budget 2016, it was
increased to Rs 5,000. In the Union Budget 2017, it has been increased to Rs
2,500, for people with net taxable income up to Rs 3,50,000. After the Union
Budget 2019, the government increased the net taxable income by ₹5 Lakhs. The
maximum discount limit of 87A has also been increased to Rs 12,500.
What is Income Tax Rebate?
An income tax refund can simply be
understood as a form of tax refund that you receive from the tax authorities in
certain circumstances. A person is liable for a tax credit if he or she pays
more tax in a financial year than they have to pay to the government. To take
advantage of the tax break, make sure you calculate your tax liability
correctly and file your income tax return within the designated period.
What is a deduction of income tax u/s
87A?
Rebate u/s 87A provides a tax benefit
to an individual taxpayer provided his total taxable income does not exceed the
threshold of Rs. 5,000,000 for a particular financial year. That is, if the
total taxable income exceeds Rs. 500,000, he will not be eligible for the
benefit of tax relief under section 87A.
When did Section 87A come into
force?
The Section 87A deduction was first
offered in the year 2013 and has been in force for many years, only reinstated
in 2019. According to the new provisions of Section 87A, any person with
taxable annual income up to Rs 5 lakhs is eligible for an income tax refund of
Rs.12,500. This actually translates into the fact that people with an annual
income of less than Rs 5 lakhs are effectively exempt from income tax and can
actually save income tax in
Section 87A- Then and Now
It is interesting to note that the
income tax refund provided under Section 87A has undergone many changes since
its introduction in 2013. It was only in the financial year 2018-2019 that the
income tax refund provided under Section 87A ended with much less Rs. 2500. So,
if your total taxable income was above Rs 3.5 lakhs and your tax liability was
above Rs 2,500, Section 87A could no longer be a tax relief target for you.
How can you claim a tax refund under
Section 87A?
Under Income Tax Section 87A, you
can claim a refund of Rs 12,500 from your tax liability. Here are the steps to
claim this 87A reduction:
Step 1. First calculate your gross
total income for the previous financial year
Step 2. Subtract from this any
deductions you claimed for tax-saving investments
Step 3. Now you arrive at your
Gross Total Income after taxes. This is your taxable income for the fiscal year
(or previous year) .
Step 4. Estimates your gross tax
liability on any income, but does not add any deductions to that amount
Step 5. You can claim an 87A reduction on your gross tax liability prior to delivery and arrive at the net tax liability.
Feature of this Excel Utility:-
1) This
Excel utility prepares and calculates your income tax as per the New Section
115 BAC (New and Old Tax Regime)
2) This
Excel Utility has an option where you can choose your option as New or Old Tax
Regime
3) This
Excel Utility has a unique Salary Structure for Government and Non-Government
employees Salary Structure.
4) Automated
Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the
F.Y.2000-01 to F.Y.2022-23 (Update Version)
5) Automated
Income Tax Revised Form 16 Part A&B for the F.Y.2022-23
6) Automated
Income Tax Revised Form 16 Part B for the F.Y.2022-23
